Is your woodland self funding?

[Treeation]

Just wanted to know how many of you woodland owners are able to say that the income generated from woodland enterprise covers all your running costs? Grant money aside.

Do you make money, loose or break even??

I am currently managing a 5 blocks of woodland on an estate (in total 25acres) and am aiming to be self funding this year through charcoal, courses and selling standing timber. Its a tough challenge but one that needs to be put in place for the future management of the woods. I have received initial EWGS grants for writing management plan and woodland improvements but grants should not be relied on as they are not forever, by creating good local customer base of a wide range of products I hope the day - to - day management regime will be covered through the woodland enterprise.


Would be really interested in any responses thanks in advance

Patrick
www.treeation.co.uk

[oldclaypaws]

I've done my figures over an 18 month period as per a small business as follows, I think I'd conclude it makes a small pocket money income which just about covers costs. There will be significant timber revenue, but when you think its taken 130 years to grow, the capital return might work out around 1% per annum, far less than stocks or just leaving it in a deposit account. What you can't put a value on is the immense pleasure and sense of well being it gives us.

Income;

Fuel Sales 200
Fuel for personal use or future sale 600
Walking sticks 170
970

less Costs

Fuel for Chainsaw / Brushcutter 25
15
Log nets 30
Tractor 100
Consultant 80
250

Gross Profit 720

Capital Equipment;

Chainsaw and PPE 800
Brushcutter 400
Sundry Tools 200
Gate,posts, chain 140

1540

Depreciation over 18 Months @20% pa (30% over 18 months) 462

Net Profit over 18 months 258

[Stephen1]

But Shrewd businessman as you no doubt are Paws What happens to that profit figure if you factor in the opportunity cost of the capital invested in the wood. Even in these days of bizarrely low interest rates I doubt that £258 over 18 months would cover the 'cost' of the capital if you had had to borrow it, or the return that capital would have yielded even if badly invested elsewhere.

Of course, like me, I know you don't see it this way - I'm just making the point from a purely financial / business position.

I don't think small woods can be truly self funding - in the truest financial sense at the moment. Covering future costs from small woods is possible post purchase - and from slightly larger woods, if providing all the labour yourself, then a low living income may be possible. I would hope this becomes increasingly easy in the future, I genuinely suspect that it will.

[oldclaypaws]

As a friend of mine wisely said as I was contemplating purchase of wood; "What's to loose? You enjoy it while you have it, get free fuel, and if at any time in the future you change your mind and decide to sell it, the chances are it'll be worth more than you paid."

What I hadn't anticipated is how much the wood has come to mean to me, the immense pleasure I get from being there, keeping fit, getting fresh air, appreciating nature and the seasons. Can't imagine giving that up and there's not another wood near us I'd ever swap it for. If you're the sort of person who's motivated by their bank balance and can't see the attraction of a wood, more fool you. Some people will put a value on everything and know the true value of nothing (like the current Environment Secretary).

Just one economic justification- I notice that many of the stand-alone pretty & level mature woods sold by woodlands.co.uk have increased over the last year or so from around £10,000 / acre to nearer £12,000 / acre. Compared to whats happening to cash in an ISA; losing value against inflation, thats a pretty good appreciation. If I won the lottery, (a bit difficult as I never buy tickets), I'd be more than happy to buy a few hundred acres of woodland, have a cabin in the middle, and manage it with a pro wildlife and biodiversity agenda. Cruises, flash cars and Rolex's do very little for me. The more insane urban life and its pressures get, the more people would like to escape it, and demand for small woods is likely to stay high, prices will increase.
When you look at a 5 acre wood for say £50-60,000 and compare what you get to a bottom of the market small flat at more than twice the price, I know which I'd sooner have !

[Wendelspanswick]

I am running our woodland as a business, mainly as a tax loss to offset my tax bill from my self employment. I would rather my money went to helping to improve the natural enviroment rather than supporting scroungers and MP's!

[oldclaypaws]

I should add that due to an Estate agent doing a very lazy and badly researched sale of my wood, and nobody having done any significant felling since 1880, I've deduced in the last few months that the price I paid for my wood is likely to be well below the market value of the standing timber.

The Council sold my wood as an afterthought, because it was surrounded on 4 sides by the council owned valuable farm which was worth £1m+ (they are controversially selling the County farms because they are skint, they've owned them since 1920 when they bought a 2,000 acre estate to get WWI veterans back into work). Although the wood had never been part of the leased farm, they put it up for auction in case someone wanted to buy all the farm, and didn't want some oik or travellers living in the middle of it in a bender or caravan.

The agent wandered into the wood 15 yards, took one picture of the bluebells, and listed it in the catalogue (entirely) as 'A pretty Copse full of bluebells, 5.25 acres, estimate £20,000'. If they'd paid a forestry consultant to walk round, they would have been told 'You have about 150 very valuable mature 130 year old oaks, some worth over £1,000 each.'

Bizarrely, the consensus is the wood will benefit and be improved by a fair degree of selective and careful felling and more diverse replanting, and the net income from this improvement could exceed what I paid for the wood.

As such, rather than being self funding, the wood is likely to more than pay for the capital cost within the first few years, and then be a delightful lighter more diverse copse nearer to something more natural rather than essentially an oak plantation on an ancient site. I'll have a better wood than I bought, for free !

Result.

[Bulworthy Project]

We gain our sole income from our woodland based business. From charcoal and running and hosting courses.
Admittedly we work long hours and have very low living costs, but we live very well. We eat better food than we did when we were in employment thanks to natures harvest and have a rewarding lifestyle.

[Treeation]

Thanks for all the replies.

Thanks for the break down oldclaypaws thats very interesting. Sounds like you got yourself a great deal too on your woodland purchase

Congratulations bulworthy im glad to hear someones found a winning formula!

Of course we cant put a price on the health benefits, enjoyment and the long term value we are adding for the next generation of woodlanders.

Ill keep jotting down the figures for my woods and let you know hoe I get on.

[oldclaypaws]

I've always thought there's more chance of an income from appropriate sympathetic activities conducted in a woodland setting than sale of pure woodland produce. Bulworthy mentions courses.

As a craftsman, although I'm not necessarily looking to engage in purely wood-related crafts, a woodland makes a wonderful setting to hold open air exhibitions of craft work or to offer workshops, as Guy Mallison does. Its permissible to have activities going on 28 days of the year without any planning consent, although when considering this I was keen to ensure it didn't impact negatively on either the wood or the neighbours, it needs to be small scale which makes it more informal and intimate.

We have an annual Art /Craft week in Somerset, where several hundred visitors come to visit a series of advertised venues. I've no longer got a retail gallery to sell from, but a clearing in the wood is perfect, without any costs. I just need to make maybe a dozen parking spaces and ensure the wood is safe. Offering a walk round an ancient private wood in addition to a display of crafts is quite a draw and should be both enjoyable for visitors and a commercial success. Once I've got a shelter and composting loo, I propose to use the wood several weekends of the year to invite interested clients to view my latest work there. It should have minimal impact on the wood but be a wonderful setting and an opportunity to share the wood with friends.

The possibility of using some of the onsite clay and wood to create the pots makes it quite a holistic attractive propositon, and I may in time make a few wooden craft items too. Woods are awesome places to inspire creativety, particularly if you draw inspiration from nature and need to be relaxed and in a playful childish frame of mind to unwind and let your artistic spirit free.

Although the public have a fairly narrow idea of the shapes a pot should be, I find by spending time in the wood shapes influenced by roots and decayed wood are creeping into my consciousness and are likely to lead to new ceramic forms. There's more chance of selling them if they are displayed in the environment that inspired them, probably sitting on logs or filled with sprigs of Ivy and twigs. -Kelly kettle bubbling away offering a free cuppa as potential purchasers contemplate the work and savour the setting and occasion.

[Landpikey]

I was discussing our wood burner usage with friends and mentioned that we have "free wood". They responded that at £X it was hardly "free".

Then my wife chimed in with all the things we (mainly me) have bought to use in the wood;

Trailer, new log burner with back boiler, plumber to install the heat exchange control box thingy, kelly kettle, billhook, bill hook sharpening stone, new chain for the saw, chainsaw helmet, chainsaw trousers, chainsaw boots, camouflage tarpaulin, para cord (for the tarp), quad bike (for hauling logs), straps for securing loads in trailer, various pieces of rope, hand saws, dutch oven, dutch oven tripod, toasting forks, varous books, .....

I started to protest that some things were second hand and some things I'd received as presents but all to no avail.

The wood will save us money in the very long term, won't depreciate in value, will be something that we can pass on to the kids, may have inheritance tax benefits (may change depending on future govts!), is exceptionally good fun, is a health benefit to all that use it, is better now it is being managed, is enjoyed by the dogs as well as kids, and all the other reasons mentioned elsewhere on the forum.

However, self funding? For us it is a resounding "NO".

But nobody in our family would sell it for all the tea in china.