Logging Firm Succession and Retention

Abstract

A mail survey of logging firms operating in the North Central region of the United States was conducted to understand familial ties, short-term business longevity, and succession decisions from the perspectives of owners. The objectives of the study were to: 1) characterize owners of logging firms; 2) examine the presence of familial ties in logging firms; 3) determine the expectations regarding future generations taking over family logging businesses; 4) determine the likelihood of firms remaining in business; and 5) determine what factors influence the likelihood that firms will remain in business. Results show that logging firm owners are predominantly white males with an average age of 48 years and 25 years of experience in the logging industry. While many firms indicated that they would be in the logging business in the next 5 years, 23 percent indicated that they would not. Over three-quarters of responding firms had familial business ties and over half of those respondents felt that a family member taking over the business was very or somewhat likely. Positive factors influencing the likelihood of logging firms remaining in business were increasing timber volume harvested and level of increasing profit margins. Factors that negatively influenced the likelihood of firms remaining in business were decreasing profit margins, lack of significant contribution of logging firm to household income, attitudes about challenges facing the logging industry, and age.