how to start a portable sawmill business

[Mark Bolton]

It seems any sort of farming/cultivating work is a bad business venture all around. I routinely hear in documentaries and stories of how farmers barely make enough to make ends meet, pay for equipment maintenance, etc.. The only reason people do it is heavy government subsidy or they are just stuck with the land.

But at the same time, if everyone just decides to go sit in an office as a consultant, then where will our foods come from? Seems like just about everything essential about society doesn't make much money or are a poor business venture. I feel like if you ask anyone if it's a good idea to start a business doing X a lot of people will say how hard it is, or how little money is in it unless you have giant contracts. I'm feeling this could start a famine if farmers decide to quit or if not enough farmers are around to replace the ones that retire due to lack of money from farming... I mean you can't eat computers or filing cabinets or even dollar bills. At the end of the day various skills essential to society (plumbing, electrical, carpentry, welding, etc.) are getting depleted because people get the idea that they should go to college and work at some office pushing papers around.

So all I can say is, yes it sounds like a poor business venture but think of the possibilities. I would say you should be skilled at whatever you're doing, if you lack that skill then don't even think about it. Marketing is important but if you are good at marketing but lack the basic professional skills in your work, then even the best marketing experts can't help you... besides someone else can always figure marketing out (or it will somehow figure itself out once words of your skill gets out). What's important is someone's gotta do those jobs, and quite frankly a lot of people doing those jobs are going to retire without anyone to replace them. Anyone aspiring to replace them should be welcomed.

I have heard this many many times from old local farmers and I do believe it to be true. "You cant eat your computer!!" HAH... I have heard that over and over. I agree fully that the move is to the corporatizatioin of virtually everything. Food, construction, mechanic work, on and on. Things are getting to a point where it is so costly for small operations that you cant help but to wonder how long people will continue to try. As David E posted above, if your going to be legit' and try to pay all the fees, insurances, health care, savings, retirement, and the like, its nearly impossible in many of these professions to really make any money if you honestly track your hourly rate. The old adage that if your one person you'll never make money, add two people and your employees will earn more than you do, and when you hit 4 you'll start to make money is very true. The problem is you have to want to be a manager when you started the business to be a maker/farmer/whatever.

Its funny because the conversation dovetails into the other thread in the OT forum about off grid/under the radar. It sure seems it will push many people to go under the radar and work for cash, but that has always been the notion floated yet it never happens. People want stuff, and to have stuff you have to be above the radar, and to be above the radar you gotta play the game.

I have no idea where its headed, and really dont care any more, I just work...

[Mark Bolton]

I have a sawmill (manual w/o hydraulics). I'd starve if I had to rely on it to earn a living. But, I'm not saying it's impossible. If I could market products derived from my milling --- finished slab tables, wide boards, sculpture with interesting grain and figure, gun stocks, etc. --- well, you get the picture. You should market from tree to finished product. Anything else and you are just a middle man, and middle men only make wages, if that (after expenses).

I actually think if you take the "making" part out of this, and all the factors were in place, that this formula is actually the only way to make it in the small scale milling business. You'd have to have a good source of odd, low cost wood. You'd have to maximize your yield. And you'd have to sell the highest priced stuff you can. This would be as you say, wide, figured, odd. Take bushy walnut crotches, cut them into turning blanks, dip them, dry, sell. You could get hundreds out of a junk tree. Gun stocks and so on. But no making. The problem with this business model is it will take 3 years to dry a thick crotch figured slab and your keeping your fingers crossed the entire time that it will stay sound. Same for the blanks and the stocks. Your cutting material that wont pay you for a long long time. The wide/figured is viable if you have access to a market that will pay provided your a decent sawyer and have access to drying.

The killer is the 15-20K+ investment in a mill and peripherals (if you can setup for that).

[Scott T Smith]

And finally - It is very difficult to make a very decent living off of your own labor (as a one-man business) in any kind of business if you truly add up all of your expenses. Invariably, you end up needing to hire a few "helpers" or a "crew" to do anything that produces any kind of steady revenue stream of any value at all and now you have a business to run. The lack of being able to accurately figure out the cost of the business is the single most contributing factor in failed businesses. Example - "Well, I already own the truck so I don't have to put any cost in for that". It wears out and will need replacing, never mind maintenance. By decent living, I mean raising kids - putting them into some kind of schooling when they finish public school, health insurance all the way around, maybe buy a (modest) home or put a roof on the one you already have, put aside a little for old age, etc. Probably many of us have been where you are now and it is not an easy path you are thinking about in general, much less when you apply the excellent info provided by Mark B above.

^^^ This is very true.

Robert - I own three mills (band, swingblade and slabber) along with two kilns, and I could talk for hours in answer to your question. Here is the short answer.

1 - most sawyers that are charging $50.00 - $60.00 per hour do not understand the true costs of doing business, and at the end of the day they end up making not much more than minimum wage. Some of them are folks that have owned their mill for many years; the rest are relatively new that jump in for a year or two and then get back out because they are not making enough to make it work out.

You have to factor in depreciation, overhead, insurance, downtime due to maintenance, ROI, etc into your business plan or else you risk spending a lot of money on something that you will give up in a few years because you can no longer afford it. Mobilization / demobilization costs are another issue, the list goes on and on. If you buy an older mill it is going to break down on occasion (worn parts), and you can't charge the customer for this downtime. So you'll have $ going out for parts and repair and not much coming in to offset it.

Log handling is a key issue when you're working with logs that weigh a few thousand pounds. With any volume, you will need some type of forklift, etc for moving logs and lumber.

I am all for people pursuing their dream, but if you are not realistic about the business plan the dream will turn into a financial nightmare.

I'll be happy to talk to you on the phone if you'd like to ask questions; send me a PM or e-mail with your contact info and we can set up a time to chat. The very best website for milling related advice is the Forestry Forum.

[johnny means]

Scott, do you make a living with you milling set-up? If so, could you describe your situation and business structure?

[Scott T Smith]

Scott, do you make a living with you milling set-up? If so, could you describe your situation and business structure?

Johnny, yes I am in the lumber business, specializing in quartersawn oak and large timberframe timbers. Here is a link to a thread here on SMC that describes one of my timberframe milling adventures: http://www.sawmillcreek.org/showthre...common-project

We operate two kilns, a band mill, swing-blade mill and a dedicated slabber. Post-processing capability includes S2S, S3S, S4S, horizontal resawing (veneer) and specilized moulding (wide plank flooring and paneling). We provide custom kiln drying and also have taken customer's lumber and turned it into flooring for their own use.

One of our projects included starting with living trees and furnishing spalted oak, pecan and magnolia veneer that was used inside the Nature Research Center in Raleigh, NC (Some of our veneer is visible in the background of this photo alongside the elevators: http://3.bp.blogspot.com/-VRtis97eOa...0/Wibbon01.jpg), and here is some spalted magnolia from the same project: http://www.ncwoodworker.net/pp/data/.../DSCN00574.JPG and spalted pecan that was used in the new DENR headquarters building: http://www.ncwoodworker.net/pp/data/...m/DSCN0040.JPG

The business structure is based upon my farm (which includes the milling and drying operation) and we ship across the country. Marketing is via our website. We've also been a vendor at the Popular Woodworking WIA show. We recently started offering mobile milling (6K bd ft minimum); historically we have milled and slabbed for others at our farm location.

[johnny means]

Scott, when you say farm, is this an actual agricultural operation? If so, is the lumber business an offshoot of the original venture?

[Scott T Smith]

Scott, when you say farm, is this an actual agricultural operation? If so, is the lumber business an offshoot of the original venture?

Yes. We started off producing equestrian hay, followed by adding timberland and a small volume of free range chicken eggs. Timber is a very long term crop (40 - 60 years), so the milling operation was added to utilize some of the same support equipment that is used for farming.

[Matt Krusen]

Scott, thanks for the insight. I've always been curious about the details behind the lumber business. I've never heard timber referred to as a crop before. Cool way of thinking. I like it.

[David Weaver]

Farming isn't the horrible business that it's made out to be on TV. It's not going to pay like being a surgeon for most, but there are big operators who make more than surgeons do, and there are small guys with 50 cow dairies who work in a rented barn and I don't know how they get by.

The income numbers provided for farming are misleading, because most of the guys I know, unless they're close to retirement, examine what they need out of their business in a given year and turn a lot of the money back into equipment and loans to expand. If they play their cards right, they reduce their paper income and reduce their tax bill but have a whole lot of equity when they retire. That might not be quite as easy to do in the future because of the cost of land.

It does seem like there's not a lot of middle ground - my relatives were all farmers. When you could no longer make a living farming 500 acres in row crops and hay, they hung it up and rented the land to someone else. Only one is still farming, and he's just basically doing it for something to do. If you're lucky enough to be a landowner with free and clear ownership, I think right now is a better time to be a land owner than farmer, though.

That said, if someone doesn't have any sense, they can run themselves bankrupt quickly trying to outbid everyone else for land and equipment. There's also been a lack of etiquette in our area in the last 6 or 8 years in terms of guys trying to rent land out from under each other, and sometimes guys let ego get in the way of making good decisions.

I used to read a few farm forums, but i'm not going to mention any here, because...let's just say....the language and conduct isn't at SMC levels of appropriateness

[Tai Fu]

One thing I'd find out is what does similar people in your business charge for their service, and match their pricing (or go a little above). DO NOT go into a price war with anyone hoping to win customers over... it may seem hard because at first people will wonder why they should use your service when you are just newly established, but as time goes on, if you do good work, you'll pick up some customers. If you go into a price war you will be very unpopular with everyone in your trade very quickly.

I'm not making a whole lot with my luthiery business but work has been more steady now, the hope is that it will slowly improve.

[Phil Thien]

I agree with others, I think just purchasing a mill and offering your services will fall short.

Instead of being just a sawyer, maybe consider being a micro lumber yard?

If you could add a [warm] kiln to your operation, and find some commercial space that isn't too expensive, you could then offer rough sawn lumber to the public.

See if you can develop a relationship with arborists to supply you with local trees that would be less likely to have embedded steel.

You could advertise on craigslist (cheap). Could probably get some free press out of the fact that you're selling locally harvested wood.

You could offer some milling services for homeowners that simply need a piece of [whatever, let's say white oak] cut to match a broken piece of molding in their homes.

May also want to consider bringing in reclaimed wood from demos (provided it doesn't have lead paint) and selling that to yuppies driving expensive German automobiles and sipping $10 coffees.

I'm not saying this would work, I just think it would have a better chance as opposed to just buying a mill and offering milling services.

[Joe Hillmann]

What services/products do you plan to offer and what tools/equipment do you need to get it done?

If you wanted to start with the least equipment possible, portable sawing would be the way to go. By portable sawing I mean that sawing is the only service you offer, not moving logs, not bucking logs, not cutting trees. Assuming your customers have the logs all in a nice neat pile you can get by with just the mill, a truck, a couple long pry bars, a can't hook and maybe a chainsaw. If you need to move logs farther than just rolling them with a can't hook you could buy/build a log arch to go on the portable jobs.

From there the more services you offer the more equipment you need. If you want to also offer log handling you then need a tractor or skid steer with forks and a trailer heavy enough to haul it. If you do offer extra services make sure you charge enough extra for it.

If you already have a truck large enough to pull the mill and already have a tractor and trailer make sure you charge enough to be able to replace/fix them when the extra hours put on them by sawing causes a breakdown or wears them out.

If you plan to do sawing at your place, if you buy your logs and have them unloaded by a selfloader they can be stacked in a nice neat pile and you won't need a tractor to get them to the mill just a can't hook and maybe a small winch. If you plan to get the logs on a semi without a boom you need a way to unload them. If you plan to get your logs from customers so you can do custom sawing you will probably also need a way to unload them. If you plan to haul any logs or lumber you need a trailer and truck large enough to handle the load.

If sawing at your own place you will need a place to sticker and store the lumber until it sells or is picked up. You also need to somehow get rid of the sawdust and slabs.

If you are sawing customers logs then you don't have to worry about how to sell the lumber, if you are buying logs and selling lumber you need to decide if you are going to sell green lumber, air dried, or kiln dried. If you sell green that is the fastest way to get rid of it but probably the lowest price. If you are selling air dried you need a place to keep a years worth of lumber before you can sell it. If you want to sell kiln dried you obviously need a kiln. Some kilns can have the lumber dried in as little as 10 days. The kiln can be powered by, wood, gas, electric, or solar.

If you are buying logs and custom cutting orders out of them you still need a way to sell the lumber you get out of the logs that don't fit the order.

Also if cutting at your place having a way to move and load stacks of lumber would be nice so you don't have to handle each board more then necessary.

If doing custom cutting make sure the customer knows they pay for any blades that need to be changed due to hitting a foreign object in the log (nails, fence, rocks, insulators) and they pay weather the blade is destroyed or just needs to be sharpened. As long as the logs aren't full of mud/dirt/sand you should get over 1000bft out of a blade before it needs to be sharpened. The blades cost up to $25 each and can be sharpened 3 or 4 times before they break and sharpening cost about $6-$9 per blade. Depending on the size mill you get and the size logs you are cutting you may burn 3-10 gallons of fuel in an 8 hour day.