Spent Boxing Day morning looking at sales and customers; if 20% of all my customers provide 50% of the revenue, why can’t 40% provide all of my revenue? How much can I sell and who do I sell it too? Is it a first come, first serve operation? What about the sustainability of long-term customer support? Does that make a difference? If you live in the big house on the hill or on the High Street, does that matter? Are you the one who always pays late, does that matter?

The challenge is that demand for ready to burn hardwood is outstripping supply. Everyone wants it. Some want it now. Some have already bought it in the spring and are looking forward to doing the same and more this spring. Others ring me up because their existing supplier doesn’t have anything to sell; their boiler has broken down or that they have just moved in. Being self-employed and in the business of selling firewood, naturally I want to help.

Now you don’t need to be a logistician to know that if you sell more than you have coming in, you will no longer be able to supply anything. Okay, so if the demand is high and the supply is low, well do don’t need to be an economist to put your prices up. However I work on a cost-plus pricing basis, so I know what my costs and my needs are, which dictates the price, in which case the price doesn’t go up with demand. So, unless I do something differently, I am clearly in danger of running out, if I cannot increase the supply to meet the additional demand.

I cut the customers into different groups, were they like Mrs. Patrick that take a big load in the Spring and a top up in the winter, like the customers that take four bags a month for five months of the year, or the ones that buy once, but may become regular customers. So, I divided them into two groups, those who are customers and those who have bought from me, I then allocated next years firewood stocks between the two groups at 50/25. That leaves 25% for any new customer that comes along. Once this volume has been used, I need to find more or take a decision about restricting supply to new customers until addition stock is place.

There is also the question of what sort of business do I want and what sort of volumes can I cope with. The ability to spend this wet and windy day in my office listening to 1970’s vinyl while I pay my bills and my taxes and working on the business rather than in the business is of great value to me. My ability to plan my year and set my own timetable, significantly contributes to my life work balance.  If I can work smart for nine months of the year and then take three months off in the summer to keep on top of our four acres, then my life work balance would contribute to my wellbeing. I imagine as I get older, working less and managing more, taking longer periods of time off as younger and stronger folk help with running the business.

Running out of firewood isn’t good for anyone. So, if you have a good supplier, stick with them. Ask them how you could work more efficiently together, talk to them about how much you need in a year and agree a delivery schedule. If you take it part seasoned in the spring, they should be able to give you a discount, often up to 15%. Once you have it, you know you’ve got it, you are no longer relying on them to supply you when you need it the most and when demand is high. Few of us know what next winter holds, but Mrs. Patrick will be filling her store in the spring as she always does.