How Much Does It Cost To Start A Lumber Yard? Plan On $615k+
Using the researched assumptions, a lumber yard needs about $615,000+ before separately sizing opening inventory, lease deposits, and any land purchase The fixed-asset plan totals $222,000, led by a $70,000 delivery truck, $45,000 forklift, $30,000 yard paving and fencing, and $25,000 racking and shelving The model also requires $393,000 of minimum cash by Month 14, with break-even also in Month 14 Initial inventory can materially change the total because the Year 1 sales mix is 50% dimensional lumber, 15% specialty wood, 30% building materials, and 5% delivery fees
Calculate Fuding Needs
Startup Cost Summary
This table covers startup assets, buildout, and the excluded working capital needed before the yard breaks even.
Highlighted CAPEX$222,000Base planning example
Excluded cash needs$393,000Outside CAPEX total
Funding need$615,000CAPEX + excluded cash needs
Cost Category
Base Estimate
Main Cost Driver
CAPEX Calculator
Delivery truck and transport asset
$70,000
Truck price and delivery fit-out
Yes
Storage and handling equipment
$70,000
Forklift and racking capacity
Yes
Site and yard preparation
$30,000
Paving, fencing, and yard work
Yes
Technology and sales systems
$25,000
POS hardware and e-commerce setup
Yes
Office, security, and signage
$27,000
Furniture, cameras, and storefront sign
Yes
Working capital reserve
$393,000
Month 14 cash trough before breakeven
No
Estimate Startup Costs with Calculator
Startup CAPEX
This estimates capitalized startup assets only for a lumber yard, not inventory or operating cash.
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Excluded funding This calculator covers CAPEX only. It excludes initial inventory, lease deposits, permits, insurance binders, pre-opening payroll, working capital, debt service, and other operating expenses unless added elsewhere. Cash timing is spread across Month 1 through Month 7.
What should the CAPEX tab show?
This screenshot shows the financial model tab with startup costs and CAPEX; open the Lumber Yard Financial Model Template and review assumptions.
Key screenshot highlights
$222k fixed assets
Month 1–7 launch spend
Depreciate or amortize
Separate inventory, losses, working capital
$393k min cash, Month 14
Break-even Month 14; 28-month payback
Year 1 EBITDA -$336k
Year 2 EBITDA $397k
Compare 3 Startup Cost Scenarios
Startup cost scenarios
A lumber yard's startup cost jumps fast as you add yard size, inventory depth, trucks, and covered storage. Lean, Base, and Full help you match the opening plan to demand and cash.
Lean, Base, and Full launch cost comparison for a lumber yard.
Scenario
Lean LaunchLow-cash start
Base LaunchCore build
Full LaunchScale build
Launch model
A leased-yard launch with a narrow SKU set and tight working capital.
A standard launch built around the sourced $222,000 CAPEX and $393,000 minimum cash need.
A larger launch with deeper inventory, more covered storage, and owned logistics assets.
Typical setup
Use leased or used equipment, outsource delivery, and hold smaller opening inventory.
Includes one $70,000 truck, one $45,000 forklift, $25,000 racking, and $30,000 paving and fencing.
Add more payroll, more storage, more inventory, and room for future expansion.
Cost drivers
Leased yard
limited SKUs
used equipment
outsourced delivery
smaller inventory
Truck
forklift
racking
paving and fencing
working capital
Larger yard
deeper inventory
covered storage
owned logistics
higher payroll
Planning rangeCAPEX only
$250,000 - $450,000Lower cash need
$600,000 - $650,000Model anchor
$900,000 - $1,300,000Higher capital
Best fit
Best for an owner-operated local yard testing demand before a bigger buildout.
Best for a contractor-focused yard that needs a solid local footprint without extra scale bets.
Best for a full-service supply yard serving heavier contractor demand and broader material mix.
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Planning note: These scenario ranges are researched planning assumptions, not exact vendor quotes or loan offers.
How do you finance a lumber yard startup?
A lumber yard startup gets funded when you show a clean use-of-funds plan, a separate inventory financing plan, and proof you can cover seasonal cash swings. Here’s the quick math: planned CAPEX is $222,000 from Month 1 through Month 7, cash need peaks at $393,000 in Month 14, and lender payback lands at 28 months. Investors will also watch Year 1 EBITDA of -$336,000, improving to $397,000 in Year 2 and $2.249 million in Year 3.
Lender-ready funds plan
Truck, forklift, and racking need fixed-asset funding
Site work and POS hardware belong in CAPEX
Opening inventory should be financed separately
Working capital covers payroll and slow turns
What investors will test
Gross margin assumptions must be explicit
Delivery revenue should be modeled separately
Receivables can strain cash fast
Seasonal cash needs drive the Month 14 peak
How much money do you need to start a lumber yard?
A Lumber Yard needs about $615,000+ to start, before separately sized opening inventory, deposits, optional land purchase, and debt reserves. Here’s the quick math: $222,000 in CAPEX plus $393,000 minimum cash need by Month 14; for operating focus, see What Is The Most Important Indicator Of Success For Lumber Yard?.
Startup cash
$222,000 equipment and setup CAPEX
$393,000 minimum cash runway need
$615,000+ before inventory and deposits
Month 14 projected break-even point
Cost drivers
Yard size changes setup cost fast
Lease versus land purchase matters
Product mix drives inventory depth
Delivery fleet adds capital pressure
How much inventory does a lumber yard need?
A Lumber Yard should size inventory as working capital inside current assets, not as CAPEX, and the right amount depends on contractor demand, SKU breadth, supplier minimums, and reorder timing. In Year 1, the mix is 50% dimensional lumber, 15% specialty wood, 30% building materials, and 5% delivery fees, so stock has to cover walk-in buys and repeat contractor orders. The model also says 3 units per order and 15% buyer conversion, but the opening inventory dollar value is not provided and should be quoted separately.
Core stock
Framing lumber for job starts
Treated lumber for exterior use
Plywood for sheathing and panels
Engineered wood for structural demand
Order logic
Decking for contractor projects
Fasteners and high-turn supplies
Reorder timing to avoid stockouts
Lumber price swings affect cash tied up
Key Takeaways
Site prep drives most opening cash.
Inventory needs working capital, not CAPEX.
Forklift and racking come first.
Land purchase stays optional here.
Lumber Yard Core Five Startup Costs
Site, Yard, And Facility Preparation Startup Expense
Yard Buildout
Site prep covers lease deposits, grading, gravel or paving, drainage, fencing, gates, lighting, loading zones, office setup, covered storage, and signage. The sourced yard buildout line is $30,000 for paving and fencing, plus $8,000 for initial signage. Keep land purchase separate; it is optional and not in this startup CAPEX.
Cost Inputs
Here’s the quick math: start with lease deposit, then add site work by acreage and surface type. A lumber yard lease is $15,000 per month, and utilities run $2,500 per month. Ask for quotes on stormwater, security, delivery access, and whether covered storage is needed on day one.
Measure yard acreage first
Choose paved or gravel surface
Price drainage and gates
Save Smart
Cut cost by matching the site to traffic, not ego. Use gravel where drainage is simple, and reserve paving for loading lanes and high-wear areas. Skip covered storage if first-year inventory can stay exposed safely, but don’t underbuild fencing, lighting, or gates. One clean rule: spend on access and security before finishes.
Price only day-one needs
Compare paving versus gravel
Defer optional covered storage
Refinement Checks
Before you lock the budget, ask five things: how many acres, paved or gravel, stormwater needs, security level, and delivery truck access. Then confirm if office space and covered storage are needed on day one. Those answers decide whether the site lands near the sourced $38,000 buildout or needs more.
Initial Lumber And Building Materials Inventory Startup Expense
Opening Stock
This cost is working capital, not CAPEX. It covers the first buys of framing lumber, treated lumber, plywood, engineered wood, decking, fasteners, and contractor-grade items. Size it from SKU depth, supplier minimums, and the first reorder cycle, not from a fixed dollar guess. The Year 1 mix is 50% dimensional lumber, 15% specialty wood, 30% building materials, and 5% delivery fees.
Inventory Mix
Use the sales mix to set quantities: $25 dimensional lumber, $75 specialty wood, $15 building materials, and $100 delivery fees in Year 1. A contractor-heavy yard needs deeper stock and faster turnover; a DIY mix can carry more variety but fewer pallets per SKU. Seasonal spring demand and commodity price swings mean smaller, more frequent buys protect cash.
Ask for supplier minimums.
Match stock to lead times.
Trim slow movers fast.
Cash Control
Keep opening inventory tied to payment terms and reorder timing. If vendors give short terms, you need less cash buffer; if lead times run long, you need more. Avoid overbuying slow movers just to fill shelves. The real risk is cash locked in lumber that prices can move on before you sell it.
Core SKUs
Start with the lines buyers ask for most: framing lumber, treated lumber, plywood, engineered wood, decking, fasteners, and contractor-grade materials. That keeps the yard useful on day one and cuts dead stock. One clean rule: stock depth should follow turnover, not shelf space.
Systems, Compliance, Insurance, And Launch Staffing Startup Expense
Opening systems
For opening day, budget $10,000 for POS hardware, $15,000 for e-commerce setup, and $7,000 for security cameras. Add $800 per month for ERP/CRM software and $1,000 per month for property insurance. Here’s the quick math: that is $53,600 before payroll, marketing, and quote-based permits or binders.
Compliance file
Business licenses, sales tax registration, professional fees, and permit work sit here, but their costs were not provided. Keep them as quote-based line items so you can compare bids cleanly and avoid padding the buildout. One clean rule: separate land or leasehold work from compliance fees, since land purchase is optional and not part of the provided CAPEX.
Launch spend
Launch marketing is $1,500 per month, or $18,000 in year one, so set a tight opening calendar and cut channels that do not bring contractor accounts. The ERP/CRM and ad spend are the easiest places to trim without hurting compliance or service, but don’t delay the launch team’s training or the first customer outreach.
Day-one crew
Year 1 launch staffing is 1 general manager, 2 sales associates, 3 yard workers, 2 delivery drivers, and 1 administrative assistant, for $440,000 in annual payroll. That is opening readiness only, not a full operating model. Keep hiring and training tied to the store open date, because carrying payroll too early burns cash fast.
Delivery And Logistics Asset Startup Expense
Truck Setup
Delivery is a scale modifier, not a must-buy on day one. Plan for $70,000 for Delivery Truck 1, plus 2 driver FTEs at $45,000 each. Use the 5% Year 1 delivery-fee mix and $100 fee assumption to test demand before adding more vehicles.
Cost Drivers
This cost covers flatbeds, trailers, loading equipment, route planning, insurance impact, and driver readiness. Build the estimate from truck count, delivery miles, coverage rules, and whether you outsource part of the route work. Fuel and maintenance are tied to 25% of Year 1 sales, so the bill grows as volume rises.
Price the truck and upfit separately.
Quote insurance before launch.
Check route demand by zone.
Keep It Light
Do not buy a full fleet unless order density justifies it. Start with outsourced delivery where it fits, then add assets only when dispatch time, insurance, and driver schedules support it. That keeps cash free for inventory and yard operations instead of parking money in idle trucks.
Use carriers for overflow loads.
Delay trailers and extras.
Track empty miles weekly.
Year 5 Pressure
By Year 5, delivery fees rise to 9% of sales mix, so logistics can become a bigger revenue line and a bigger cost line. The test is simple: does delivery revenue cover truck, labor, fuel, maintenance, and insurance without squeezing margin?
Material-Handling And Storage Equipment Startup Expense
Day-One Gear
A forklift is the core day-one buy at $45,000, paired with about $25,000 for warehouse racking and shelving. Add banding tools, scales, safety gear, and yard traffic controls now; keep a loader and saw station optional. Purchase sets the asset base, while lease or used gear lowers upfront cash but needs vendor quotes.
Cost Inputs
Estimate this cost from unit count, rack bays, and quote price by asset type. For a lumber yard, the opening set covers forklifts, cantilever racks, pallet racking, banding tools, scales, safety equipment, and yard controls. Current CAPEX includes one forklift, but not a loader or saw station, so those sit in deferrable capacity spend.
Use vendor quotes, not guesses.
Separate core from add-on capacity.
Match spend to storage footprint.
Order Growth
As units per order rise from 3 in Year 1 to 5 in Year 5, the yard needs more handling speed, more staging space, and tighter traffic control. Day one can run on one forklift and basic rack capacity; later growth justifies loader or cut-station spend only if order mix makes those bottlenecks real.
Buy Later
Lease or used equipment can protect cash, but the tradeoff is service risk and inspection work. Start with the forklift and rack system, then defer a loader, saw station, and extra handling gear until throughput proves the need. That keeps day-one capital tied to must-have flow, not nice-to-have capacity.
