Starting a portable sawmilling business

      Advice on making a living with a start-up sawmilling business. June 24, 2001

My dad and I are contemplating opening a portable sawmilling business. We both have woodworking experience. Can a man make a good living in this business? Any advice?

Forum Repsonses
You might consider starting out custom sawing first (if you have sufficient demand), and ease into buying logs and selling lumber later. It depends a lot on the area and the economy. In my area, when we started in '96, we couldn't scare up much custom work. Now more comes looking for us all the time. You need to know what to expect from each log you buy, and just what you are going to do with it when you buy it. Same with standing timber. At best you are going to get some unpleasant surprises from time to time, like the 34" dbh red oak I bought that was 60' to the first limb. Beautiful tree- except the first log was about 70% buckshot holes!

Wood Mizer provides a workbook-type document that can help figure out the possible profit from various models of their mills. Itís simplified, but you may find it helpful. They can also connect you to a Wood Mizer owner in your area that you can spend some time with.

Looks to me like no matter what mill you select, itíd take about two good days of profitable production each month to make the payments on the mill. The smaller the mill, the less production, but also the less of a payment. The larger the mill, the more production and bigger payment. I suggest getting the most productive mill you can afford, if you want to make two livings with it.

Probably the best way to get started is to do custom mobile sawing. Depending on local competition, you should never be out of work once the word gets out. To get the word out, just set up and saw along a busy road where people can see you. Bend over backward to do the best job you can and word of mouth will take over in your favor. Donít try to get business by undercutting the other guys on fees. Your potential customer will wonder why youíre cheaper than the other guy.

Buying logs and sawing grade and custom lumber adds a lot of overhead with inventories of logs, support equipment, etc. The rewards can be more control over your work and more profit. But there is a lot more to know and more risk.

Finding markets for your lumber is somewhat like panning for gold. You just have to know where to look and keep looking. There are probably lumber brokers in your area. They may be reluctant to buy from a new guy until you prove yourself. Classes on lumber grading and experience would help a lot.

You mentioned experience in woodworking. That could work very well for you in a niche market setup. In my area there is a family who custom builds homes. They are in very high demand because they custom saw, dry and mill from native hardwood all the millwork in the homes they build. Wood is the cheapest in the tree and most expensive in the end product so the more you process it, the more return you can expect. Again, though, you've got to have the experience and equipment.

Consider the cost of support equipment and other issues, i.e. tractor or forklift, truck or trucking, edger or on the saw, flitch disposal or grinding, value added equipment, planer, moulder, kiln, dry storage. Lumber delivery or customer pickup, zoning issues? "Highway Commercial" or "Manufacturing"?

In inclement weather, what do you do? Perhaps work under a shelter or do indoor work on value added projects like planing.

Don't let the numbers fool you. The daily numbers for most sawmill operations look pretty good, if you saw 8 hours a day 5 days a week with no interruptions, no breakdowns, no customer time, no time spent sharpening blades, no time for routine maintenance, no weather days, no travel days, and good timber stock to start.

Another issue: Spend 25k on a new band mill or 3500 on an older Frick circular mill. Using an inexpensive starter mill like the ones (typically an O Frick) here in NC that are always for sale could be a good way to wet your feet in the business without committing your right arm. This is another large discussion on what kind of mill, uses, applications, and production.

I have spent much more money on the support equipment than on the saw.

From the original questioner:
My father has a shop fully capable of building cabinets or other furniture. I may also make this part of my business. Of course, I would have to build a kiln, or have someone dry the wood for me.

I would suggest you look hard at a used bandmill. There are a lot available in trade magazines and on the web.

If you can use high quality, kiln-dried lumber, you can make decent money. You can build a solar kiln for very little, just be sure and buy good logs, even if they cost a little more.

Be very careful of the cost and profit projections the various bandmill companies give you. There are a lot of hidden costs they don't talk about.

Also, one of the best ways you can learn about the quality of logs is by custom milling logs for other people. If you can get away with it in your area, cut by the hour, not by the board foot. If you cut by the board foot, people will line up the worst junk logs you ever saw.

Here is a link that may offer some information for you:
An overview of sawmill operations

Watch the real cost and profit involved. Don't get personally involved with the dream without checking the numbers first. And work the numbers with a variety of scenarios---good-moderate-poor condition type of thing. You have to get serious about learning the lumber business.

One positive aspect of what you are looking at is this. The total dollar volume of this industry is mind boggling. Where I live alone (San Luis Obispo, California) an excess of 50 million dollars a year is spent on wood.

The market is a no-brainer. Substitute and compete and out-service and custom mill and talk and read. Oh, and don't forget, bring about $150,000 if you really want to get into it.

$150,000 here in Southern Georgia and you could retire! What are you doing sawing wood? Living expenses must be at the top of the chart out there.

We have guys running profitable businesses with a $5,000 sawmill by filling a niche, working smart and selling creatively. What they can't make in production they have to make up in smarts. Sometimes that means supplementing with another job, but they are still in there with a dream.

The comments below were added after this Forum discussion was archived as a Knowledge Base article (add your comment).

Comment from contributor A:
On the question of portable sawmilling as a business... good luck. I started with nothing but a Wood-Mizer LT40 manual mill, a truck and a trailor, thinking I would make bucks running around milling wood for people and selling lumber from trees we own. In three years I've found about a 150 hours of work out there. 3 of 5 work out. The rest I've done for myself. I haven't sold too much lumber either. Nobody wants to pay what it's worth. If you want to sell lumber, get ready for the support equipment. I have a small knuckle boom log loader now, but it was hard moving logs with just chains, ramps and come-alongs as well as two-man carrying logs. I even have a Jonsered iron horse mini log skidder now, but that hasn't help make any money, though it is fun as heck to go to someone's back yard and move logs. I now have more money invested in eqipment than the cost of the mill. Don't become a logger. Buy your logs. Have the customer before you cut anything, unless it is for yourself. Go small to start. Wood-Mizer lt25 can do the same stuff as the big one, just not as fast. Develop a business plan. Two partners should both be on the same page. Hobby/business. Have a barn and decent truck. Have a cash flow. Don't sell anything cheap. Keep your focus. Don't give up, even when people don't pay what they agree to. And watch out for retired income subsidized old farts who don't care if they make a profit or not. And maybe when the smoke clears, you'll have some money in your pocket. People can and do make money. It's not easy. Sometime I wonder if I should have just bought a bunch of logs and subcontracted the cutting for anything I had needed. Oh well, it's good exercise, and you can always burn your mistakes.

Comment from contributor H:
Amen on the support equipment. I started with a Wood-Mizer LT27, which is a manual mill. I added 12 volt gear motors to it and basically converted it to a LT40. Later I put in a kiln, then bought a Logosol moulder and Cat forklift. I found out after much trial and error that you must find a niche. I finally decided to cut 1x6's, kiln dry them and mould them into T&G. An old sawmiller told me that my bandsaw would cause me to go broke real slow. Of course, I had to find this out for myself. I am now putting together a Frick cir saw along with a gang saw. I will have to hire two people on my cut days, but with this configuration, I will be able to cut 6000 bf a day. That is a far cry from the 1500 that did in a day on the bandsaw. The bandsaw does have its place. I am now cutting dead heart cypress, 22 to 27 inch wide boards, which were sold before the logs touched the mill for $6.50/bf. I have about 6000 bf of this cypress. But my niche is still T&G 1x6 for the long haul. I will still use my LT27 bandsaw for some jobs. I hate to part with it, since it did cut out my log home.

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