How to Start a Reforestation Company

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The federal government provides several types of permits for reforestation companies.
The federal government provides several types of permits for reforestation companies. (Image: Pine Trees image by Antonio Oquias from Fotolia.com)

According to the IRS, the most prominent type of reforestation contract issued by federal and state agencies is for pre-commercial thinning and tree-planting. With 80 percent of the Earth's natural forests already destroyed, and with Brazil and Indonesia's remaining forests being stripped at an alarming rate (See Reference 2.), reforestation efforts are not only profitable but vital for our human survival. Starting a reforestation company is in some ways similar to starting any other type of company. You need a solid financial plan, qualified personnel, a marketing plan, business licenses, and business registration with your Secretary of State.

Create a business plan. Write down the general idea of your reforestation company. This type of company generally gets contracts from a handful of government agencies such as the Bureau of Land Management (BLM), U.S. Department of Agriculture Forest Service and local for-profit or non-profit state agencies. This will be your target market and you should include as much information about them as possible in your business plan. Also include starting costs such as equipment, labor, and office expenses. Startup cost for this type of company is roughly $100,000 on the low end, as of September 2010.

Register your business with your Secretary of State. File articles of incorporation for your reforestation company. Your Secretary of State will have sample documents to assist you in this process. Some states have online filing available. Consult with a lawyer regarding the best type of business structure for a reforestation company in your area. Depending on the type of business structure and state, registration will cost between $50 and $200, as of September 2010.

Buy equipment. List the type of equipment you will need to complete the reforestation job. Typically you will need vehicles for transportation and digging equipment. Get complementary equipment such as gloves and boots for your employees.

Get bonds. Depending on the state your operating in, you will be required to submit a bond payment before you can get your Farm/Labor Contractor's License. In Oregon, for example, the state's Wage and Hour Division requires a $10,000 bond for each partner of the company.

Get worker's compensation coverage for your employees. When you apply for the Farm/Labor Contractor's License, they will verify that you have worker's compensation coverage.

Apply for a Farm/Labor Contractor's License. All solicitations for reforestation contracts including tree planting, tree thinning, and cultivation of a crop, will contain the requirement for the Farm/Labor Contractor's Certification of Registration. It is possible to obtain reforestation contracts without a license, as many government agencies and nonprofit entities may not ask for it or require it. However, you can only become a prime contractor for the government if you have a license. Cost for the license is $100, as of September 2010. Contact your local Department of Labor office for an application of registration numbers. You will need to submit a certificate of worker's compensation coverage and the bond amount.

File a certified payroll. Once you receive a license and begin working on reforestation contracts, you will need to file a certified payroll every 35 days with the Bureau of Labor and Industries, Wage and Hour Division. The certified payrolls will list employees' names, their gross wages, and the amount withheld for taxes. The Bureau of Labor and Industries uses this process to determine whether contractors are complying with state wage and hour laws.

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