Business ventures from natural resources

Things to evaluate when considering a natural resource enterprise.

The next time you travel throughout Michigan, take care to notice the number of businesses that rely on the surrounding natural resources. Craft furniture shops use local wood to create beautiful bedframes, coat racks and more; Bed and Breakfasts in the Grayling area host special weekends to coincide with the Kirtland Warbler’s arrival and mating season; rural landowners ‘lease’ the rights to hunt on their land for a specified period of time; maple trees are tapped for sap that is boiled into tasty syrup and the list goes on. Many of us have mused about the possibility of opening or operating such a business, but the question of ‘where to begin’ can hinder the process. This article provides a roadmap of what to consider in starting a business based on.

The first step to creating a business from natural resources on the property is to gather information. Research and collect all the information you can on the subject. Consult Michigan State University Extension professionals, government agencies, libraries and the internet. Talk to people who are experienced in what you plan to do. Then, make a list of what is involved from production to marketing, taking care to note all costs involved. Example questions of what to include in your production list are:

  • What form does the customer want the product?
  • What time of year does the customer want the product?
  • How much do you anticipate the customer base will purchase?
  • How will the product reach the marketplace?
  • Are there special needs to quality or quantity?
  • Are there special packaging needs?
  • What is the long term outlook for the product? 

You marketing list should address the following questions:

  • Who are your customers (and where are they)?
  • What is the size of the market?
  • How many potential customers are there?
  • How will they learn about the product?
  • Who else is making the product?
  • Is there room for new/additional producers?
  • Is the market growing or declining?
  • What are the labeling requirements?
  • What type of regulations surround the production of this product? 

The second step is to analyze the resource base. It is important to review all aspects of managing your land to accommodate the crop you wish to harvest. Managing land can be expensive, time consuming and inconvenient if it does not fit into your lifestyle. Do your best to project costs of the operation, including supplies, equipment and most importantly, labor. Use industry averages as a basis, then adjust them to fit you situation. Be conservative to account for unknown obstacles that may occur due to inexperience, unpredictable weather or other factors. Keep records of your estimates so that you can compare with actual numbers once production begins. 

Use your estimates to determine how much financing is required to begin the venture. If you cannot cover the initial costs, search for options while estimating a time frame until the business will turn a profit. Ask yourself, are the risks manageable enough to proceed? 

Attention to detail is key. 

Record-keeping, projections and attention to detail are the keys to making sound decisions and succeeding in such an endeavor. Making mistakes is part of the process, but repeating mistakes can be costly. Be sure to do your homework and proceed thoughtfully and intentionally with every step. Finally, be sure to enjoy what you are doing! Creating and fostering a successful natural resource based business, or enterprise should be enjoyable, and a way for you to further connect with your forested property.

For more information on natural resource enterprises or businesses visit the MSU Extension website. Or, plan to attend the MSU Extension Natural Resource Enterprise Workshop on October 7, 2014 in Gaylord. For more information about the event contact me, MSU Extension Educator in Roscommon County at

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