44 Pros & Cons Of Starting A Lumber Manufacturer (2024)

Rewarding work

Starting a lumber manufacturer can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.

Scalable

With businesses and processes changing daily, there will always be demand for new features, products and services for your business. Additionally, there are several different business models and pricing tiers you can implement that will allow you to reach all types of customers.

Meaningful business connections

You never know who you will meet as a lumber manufacturer. This could be the start of an incredible business opportunity!

High customer retention rates

Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer.

Pick & choose the clients you work with

Lumber Manufactureres have the ability to choose the clients they work with. You have the freedom to work with only a few loyal clients or with hundreds of clients!

Unlimited income potential

With starting a lumber manufacturer there is no cap as to how much income you can make. The stronger your business skills and the more energy/time you put into your career, the more you'll make.

Daily physical activity

Lumber Manufacturer's typically involve a much greater degree of movement than other lines of work. Most days, you will spend your day walking, running errands for your business, and performing a multitude of tasks. This can have a positive impact on energy levels and your overall health.

Predictable income stream

Your businesses income stream tends to be predictable based on the number of customers you have signed up. This makes financial planning and outlooks much more seamless!

You can sell your product in various places!

There are various different markets to sell your product, which will help you reach different audiences and revenue streams.

Simple business model

A lumber manufacturer has the advantage of a simple business model, which makes launching and building the business more seamless.

Strong Demand & Relatively Recession Proof

The demand for lumber manufacturer is increasing year over year and the business is known to be relatively recession proof.

You can promote and sell your product on Amazon

Although there are some disadvantages to consider when selling your product on Amazon, there are also a host of benefits. Mainly, Amazon is the world's largest online retailer, so you're bound to tap into new business and reach an entirely new audience.

Make money while you sleep

The advantage of starting a lumber manufacturer is that you have the ability to have passive income and make money while you sleep. This is the dream for many entrepreneurs.

Low maintenance customers

In this industry, customers are known to be very appreciative and low maintenance. This can help with your stress levels and allow you to focus on growing your business.

Crowded Space

Competition is high when it comes to your lumber manufacturer, so it's important that you spend a good amount of time analyzing the market and understanding where the demand lies.

Motivation of employees

If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees.

Longer Sales Process

A lumber manufacturer can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers.

Low margins

The gross margins for your lumber manufacturer are typically around 30%, which can make it more challenging to incur new expenses and maintain profitability.

High employee turnover

In the lumber manufacturer, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment.

Work can be inconsistent

As a lumber manufacturer, the amount of work assigned to you and schedule tends to be more inconsistent, which may make your income less stable. It's important to set boundaries and budget accordingly based on the amount of work you plan to have.

Lack of benefits

With a lumber manufacturer, you are typically self-employed and responsible for finding your own insurance, which can be quite costly and time-consuming.

Isolation

Often times, as a lumber manufacturer, you typically work alone and do not have much face-to-face interaction with other team members.

Taxes

As a lumber manufacturer, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.

Stressful work

This line of work can be stressful for both you and your clients. This type of transaction is a significant financial decision for your client, so expectations are very high for you. Although this career path can be very rewarding, it also comes with its challenges and stressful moments.

High overhead expenses

With starting a lumber manufacturer, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below.

You may need to charge sales tax

If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out this article

Strict regulations

With any lumber manufacturer, there are strict rules and regulations as it relates to processing your product. You must follow these regulations specifically, or significant legal issues could occur.

Complex development process.

The development process for a lumber manufacturer can be quite complex, which may cause delays and challenges when launching and growing your product.

Complex maintenance

Your lumber manufacturer will require a long-term investment due to the need for updates, bug fixes, and security vulnerabilities. It's important that you (or someone on your team) stays on top of this at all times.

Be prepared to get out of your comfort zone!

Although this is exciting for some entrepreneurs, it can be a big challenge for others! You may find yourself in uncomfortable social and business situations, jumping into tasks and responsibilities you aren't familiar with, and pushing yourself as far as you can go!

You might struggle financially (at first)!

If you bootstrap your business or choose not to pay yourself (or pay yourself less than you were making at your corporate job), this can be financially taxing. It's important to adjust your lifestyle and set a plan for yourself so you don't find yourself in a stressful situation.

More of a challenge to run your business from home!

Running your business from the comfort of your own home is a big appeal for many entrepreneurs. With a lumber manufacturer, you are more likely to run your business out of your office or storefront space.

Minimal physical activity

A big part of starting a lumber manufacturer is sitting at a desk for the majority of the day starting at your computer. Some may enjoy this, but others may struggle with sitting for the majority of your day without much physical activity.

Work is not always glamorous

With starting a lumber manufacturer, you may need to get your hands a little dirty. Although it may seem glamorous from the outside to start this business, the work can require a lot of physical activity and repetition.

Learning Curve

When you start your own business, you no longer have upper management to provide you with a playbook for your roles and responsibilities. You should know the ins and outs of every aspect of your business, as every decision will come down to you.

The job can be demanding

This is one of the major disadvantages starting a lumber manufacturer. It's important to understand that you may need to make yourself available on a 24/7 basis.

You may need to relocate

There can be a lot of opportunities that come your way when starting a lumber manufacturer. Although moving around can be fun and exciting, it can also be physically and emotionally taxing for you and loved ones.

High liability

Running a lumber manufacturer involves a lot of liability, which means the cost for insurance premiums may also be high.

Equipment Breakdowns

Over the years, your equipment can get damaged, break down, and may need repairs which can be expensive. It's important you prepare for these expenses and try to avoid damages/wear & tear as much as possible.

Answering Phones

The lumber manufacturer is still considered a traditional business, which means answering phones is a big part of the job. If you or your team miss phone calls, you could be missing out on potential revenue opportunities. If you are unable to attend to your phone throughout the day, it would be in your best interest to hire a call center or an employee dedicated to this.

The job can be dangerous

Your lumber manufacturer can have its dangerous moments, which puts you and your employees at risk. It's important to consider all liability and put processes and procedures in place that will prepare you and your team.

Takes time to see results & make money

Results and revenue do not come overnight with a lumber manufacturer. Often times, it takes weeks, months or even years for your work to monetize.

Technical issues can be frustrating

Technical issues are common in this business. If you struggle with the technical side of things, you may want to consider outsourcing this responsibility to save yourself the time and frustration.

More challenging to earn passive income

It can be more of a challenge to make passive income in this business. Often times, the amount of revenue you bring in is limited by the amount of time you have in the day.