I have a rare opportunity to open my own business with a guarantee sale the day I open. But to get into this business I have to open a full scale sawmill. I will be manufacturing oak stakes. I was wondering if anyone can help me with information on what type of sawmill will be the most productive with a low cost. I will need to make about 150,000 stakes a month 1.5's x 48". I do know there will be a series of machines involved. We will most likely be buying 15" 16' logs. Does anyone have any suggestions on what I will need?
(Sawing and Drying Forum)
From contributor Z:
The Woodmizer LT15 would be perfect for this.
Several big questions include: What price must you get for the stakes in order to be profitable? What to do with the bark? What to do with the low grade lumber? What to do with the clear or upper grade lumber which you can sell for more money and more profit than if you make such lumber into stakes? What to do with the sawdust? What to do with the wood scraps including the slabs and scrapes from the stake machine? Will you edge the lumber or use un-edged lumber for making stakes? What to do if the stake market decreases or another mill begins to compete? Must you run five days a week, 50 weeks a year in order to meet the demand? How many employees will you have? How much rolling stock (fork lift, log truck, lumber delivery trucks, etc.) will you need? Who will sharpen the various saw blades? Will your mill have a roof over it? Will you run in cold weather? Can you get the needed electricity? Also, there are only a few parts of the country that will have 16' logs mainly. Most will have 8' or 12'.
I do believe that $200K is a bit small for this size operation, especially because you must buy the equipment, pay for site preparation and various buildings (including an office, product storage building, sawmill building) and rolling stock (maybe $50K for a good lift and truck), and then pay for 30 days of log inventory and then 30 days after delivery of the product before the first payment, plus all the start-up costs, and so on. You need to have money for the incorporation, for an accountant and quarterly taxes, for various insurances (fire, liability, health), for electricity, for workers comp, You can use a business plan to address all these issues and answer all these questions; usually there is a local state extension person to help formulate your specific plan.
Overall, you should use a loan for getting all the equipment and buildings, and use cash for all other expenses. If you have extra cash after a month or so of full operation and you have some money set aside for a "rainy day," then you can begin to pay off the loans. Basically, you have two financial issues - making a profit and cash flow. It is surprising how often a profitable sawmill operation fails because of poor cash flow.
As for mills, I would go with a band mill and with as much hydraulics and automation as I could. I would also select a major brand with good customer support. We have a fork lift and a Bobcat skid steer loader. If I could only own one of those it would be the skid steer. I wonder if you might be ahead to hire some local band mills to mill the initial stock. Then you could concentrate on turning the lumber into stakes. The initial investment would be much less as would be the learning curve.