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Just curious

Started by NCDiesel, April 25, 2013, 05:13:31 PM

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NCDiesel

After reading for several weeks, I have a couple of observations I wanted corroborated:

Observation #1:  It appears most active forum members are doing this for income on some level.

Observation #2   I see/hear more lumber selling going on.  Many - if not most - active forum members keep inventory on hand to sell to local woodworkers.

Are these accurate?   I was wondering because they are counter to what I expected.  I expected the majority to be hobbyist sawyers and most folks cutting for projects or for customers - not inventory.

I was especially curious about the inventory part.  Carrying inventory had already crossed my mind because great logs come so unpredicatably I would prefer taking them when I find them and storing them as finished product rather than storing them as logs.   

As I mentioned when I first joined, my sawyer journey is a long term project to create a business that provides part time income and fun in my retirement in 5-10 years.   I am not looking to grow big or make it big.   But if you folks think carrying inventory is critical to success even as a part time business, I'll sit up and listen.   Even if I don't start that right away.

NCDiesel
Cooks MP-32, 2016 Ram 1500, 6K Kaufman Equip. Trailer, 1995 Bobcat 753 skidsteer 1958 Ford 861 Diesel,
Youth Conservation Corps, Clayton Ranger District, 1977.
I worked sawmills as a teenager and one fall morning I came to work and smelled walnut cutting.  I have loved sawmills ever sinc

beenthere

Keeping tabs on what you have stored away for the "right moment" is not easy.
But interested in how you plan to do that?
south central Wisconsin
It may be that my sole purpose in life is simply to serve as a warning to others

ladylake


I mostly do custom saw jobs and trailer decking and fencingm that is gone right after I saw it + little as possible inventory.  If one had a 60  x 120 shed where inventory could be kept separate that would help as mentioned what you need is at the bottom of the pile or a fussy woodworker picks through the whole pile.  Steve
Timberking B20  18000  hours +  Case75xt grapple + forks+8" snow bucket + dirt bucket   770 Oliver   Lots(too many) of chainsaws, Like the Echo saws and the Stihl and Husky     W5  Case loader   1  trailers  Wright sharpener     Suffolk  setter Volvo MCT125c skid loader

Ocklawahaboy

I work a normal job and saw for my own inventory.  On the rare occasion someone finds out about me, I go saw for them.  I am planning a yard sale to reduce the amount of moulded plastic stuff in my house and plan to stick a few boards out, fresh off the mill and put a stack of business cards by them and see if there are any takers.

Magicman

Your observations depend upon the sawyer and the market that he chooses to follow.

Originally I envisioned that I would saw and sell lumber.  This market requires storage and inventory of the various lumber sizes that are to be available to the customer.  For me, this quickly became a problem; first, not having storage sheds, and second, what I had in inventory seldom seemed to be what the customer wanted.  For example, he wanted 10' boards and I had 12'  He wanted 1X8's and I had 1X6's & 1X12's  etc.  Then there is inventory loss due to age related factors.

These obstacles led me to offering only a custom sawing business.  I do not buy logs, sell lumber, or saw on shares.  My business is to saw the customer's logs at his location.  That way I have no log inventory and no slabs, or sawdust to dispose of.

Each individual has to decide which market best suits him, his area, and his customer base.  I am comfortable with my business because when I am working, I work and when I am not, I am off.
Knothole Sawmill, LLC     '98 Wood-Mizer LT40SuperHydraulic   WM Million BF Club Member   WM Pro Sawyer Network

It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

Nomad

Quote from: Magicman on April 25, 2013, 06:03:52 PM
Your observations depend upon the sawyer and the market that he chooses to follow.

Originally I envisioned that I would saw and sell lumber.  This market requires storage and inventory of the various lumber sizes that are to be available to the customer.  For me, this quickly became a problem; first, not having storage sheds, and second, what I had in inventory seldom seemed to be what the customer wanted.  For example, he wanted 10' boards and I had 12'  He wanted 1X8's and I had 1X6's & 1X12's  etc.  Then there is inventory loss due to age related factors.

These obstacles led me to offering only a custom sawing business.  I do not buy logs, sell lumber, or saw on shares.  My business is to saw the customer's logs at his location.  That way I have no log inventory and no slabs, or sawdust to dispose of.

Each individual has to decide which market best suits him, his area, and his customer base.  I am comfortable with my business because when I am working, I work and when I am not, I am off.

     I'm 100% in the MagicMan club on this one.  I work exactly the same way he does.  And it works for me, too. ;D
Buying a hammer doesn't make you a carpenter
WoodMizer LT50HDD51-WR
Lucas DSM23-19

Ianab

Keeping inventory is a business cost. Time to manage it, space, capital tied up, and some risk (bugs or fire?)

Now if you are going to retail wood to end users, then it's a necessary evil, as you have to have product on hand to sell. But ideally you want to be turning that inventory over as quickly as possible. You don't earn anything ntill it's sold.

On the other hand, if you have good logs available right now, get them sawn and dried. Then they can be safely stored for future sale, but you will want that sooner rather than later.

There are all sorts of niches and different business models people are using (with varying degrees of success). But retailing wood seems to be a tricky one. The amount of inventory, the time customers "waste". So you end up with people that only do sawing of others logs, others will custom saw to order from their own logs. Maybe putting aside those "special" boards to sell for a premium?

Now if you figure there is an untapped market to sell wood in your area maybe it's then an option to concentrate on that rather than sawing? Buy green wood from other mills and set a kiln and machine shop instead of a sawmill?

As for right now? If you have logs, sawmill, and a market for wood, then use some weekend time to cut and sell some. Get your "hobby" business started on the side. You don't need to actually make much money, but you will be exploring the various options and how they are going to pan out. Call it market research if you like. When you do retire and have more time to spend on it, you are going to better know what works for you, and what's a waste of time. You will also have made contacts with others in the industry, potential suppliers and customers, and this lets you see what niche you want to aim for. Right now you aren't really sure right?

Also worth have a look at this guys operation. Taking things from harvesting trees to installing the wood as flooring. Way he has it figured he's growing 5X the amount of wood he's currently harvesting. But he's turnng one tree that might be worth $100 standing in the forest, into $4,000 of installed flooring.
http://timbergreenforestry.com/

Ian
Weekend warrior, Peterson JP test pilot, Dolmar 7900 and Stihl MS310 saws and  the usual collection of power tools :)

mesquite buckeye

You can't sell what you don't have, and it takes time to dry lumber.

Do you have a place to dry and store lumber?
Manage 80 acre tree farm in central Missouri and Mesquite timber and about a gozillion saguaros in Arizona.

JimFX

That is a nice link Ianab, thanks for sharing that.
A nice way to earn a living from wood!

WDH

To custom saw other customer's wood, you have to have the right set-up.

To cut logs, dry lumber, and sell to retail customer's, you have to have the right set-up. 

The set-up is not the same, so it all depends on what you like to do.
Woodmizer LT40HDD35, John Deere 2155, Kubota M5-111, Kubota L2501, Nyle L53 Dehumidification Kiln, and a passion for all things with leafs, twigs, and bark.  hamsleyhardwood.com

WoodenHead

I sell lumber and finished products such as flooring, T&G paneling, moulding, and so on.  All of the things mentioned by others already are very true.  You need lots of storage space, you carry inventory, and you aren't paid for a long time.  It takes a tremendous amount of money to buy all the equipment, to pay for logs if you don't have them yourself, and to survive long enough with the hope that your business takes off to the point that it is self-sustaining.  It is almost a year since I attempted to make a full time go of it and in all honesty I'm not there yet.  In fact, I'm actually looking for a job again to be able to support my family.

Why sell lumber instead of offer custom milling services?  Well, there are benefits as well.  Working on my own property allows me to spend more time with my family.  I don't need to travel.  And I feel there are enough sawyers in my area offering their custom cutting services (but dwindling).  There isn't as much of a demand for it anymore it seems.  Dimensional lumber is almost as cheap to buy as it is to saw (even if the client owns their own wood).  There are opportunities if I wanted to offer milling services, and I've thought about it, but I know I would have to often travel 2+hrs away.

So, selling a product(s) can be done, but it may be much easier in your area to sell a service.   

Jay C. White Cloud

Hi NCDiesel,

We each have our own slant on this topic, so in a since everyone is correct.  What I can share, is along the lines of Ian's observations/comments.  For someone just starting out, it is often (this is my observation as teacher and craftsman) that the best method for turning the maximum yield for your milling time is a mixed bag.  Special slabs are worth taking care of and stock piling but for the most part find some thing you can make from the wood you mill, and sell that.  Again, I will stress, that is just my observation for those that are just starting out and maybe only working part time.  We make timber frames and other green woodworking items from what we mill, 90% of the time.  The rest is simple board stock that is easy to air dry and/or specialty slabs that hold there value.  Note a slabs can draw a fair piece of "coin" but always makes more in a finished product.  For example a large pine slab may sell for several hundred dollars by a large traditional harvest table may sell for several thousand.  Some "butcher block" slabs with inlay and other custom work can sell for anywhere from $8k to $16k depending on the market you sell in, or higher.

Regards,

jay
"To posses an open mind, is to hold a key to many doors, and the ability to created doors where there were none before."

"When it is all said and done, they will have said they did it themselves."-teams response under a good leader.

red oaks lumber

i make flooring, t&g v-groove, s4s lumber, beams, siding ect. several differant species. most times even though i kiln dry i'll have close to 80,000 b.f of inventory. from just sawed to dried r.sawn sitting in one of my sheds.
if you are selling a product you need to have stock avalible to machine when a customer orders it.alot of my orders are 5-10,000 b.f. so it dosent take long to deplete inventory.
to help fill the voids i also custom saw, dry, plane which over the years has been a nice mix of work, not needing to hurry a kiln load to have something to work on.
the experts think i do things wrong
over 18 million b.f. processed and 7341 happy customers i disagree

m wood

Good questions NC.  and I am enjoying the varried answers.  Ian, great link you gave us there! they got a great thing going.  I have read many of the threads on here NCDiesel, regarding the niche market and making a go of it.  I do not now or ever have considered going full time and ditching a 40 hr/wk gig.  Dont get me wrong, that would be fantastic to saw full/part time and do it with more family time!

my mill has been in my posession for 2 months and I only got a few of the kinks worked out.  Kinks being everything from the mechanics and operation of the mill to the cost of running it to the location to keep it to the type of logs to saw, to the type of product to market, where  and to whom do I market.  My first assumption was "added value" in that I own about 90 acres of a mix of hard and soft woods, those raw materials gotta boost the "margin" I figured. 

All I started out wanting was to make back what I pay in NY taxes each year and maybe round trip tickets annually to see my folks on the west coast.   

Good luck NC, many more answers are surely in the queue...and I'll follow this thread as it goes, to get other wise peoples views also.
mark
I am Mark
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check out FB

red

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NCDiesel

Thanks for all the great thoughts and links - keep 'em coming.

As I mentioned, I don't want to store logs so inventory crossed my mind - mainly mine but I thought about maybe some additional for sale.  Sounded like a lot of work and storage though and my previous sawyer - the one that retired - refused to do it as he thought it was generally a bad move for a part time sawyer and I always valued his opinion.   What brought the question to the forefront is I have already been asked to cut on shares - another reason to have inventory if the log is "right".  I turned this one speciic offer down but who knows what the next one might bring??

Your thoughts are making me drift back away from the idea.....

NCDiesel
Cooks MP-32, 2016 Ram 1500, 6K Kaufman Equip. Trailer, 1995 Bobcat 753 skidsteer 1958 Ford 861 Diesel,
Youth Conservation Corps, Clayton Ranger District, 1977.
I worked sawmills as a teenager and one fall morning I came to work and smelled walnut cutting.  I have loved sawmills ever sinc

Magicman

Sawing on shares is one of the items that I mentioned in my above Reply #4.  To do so would automatically put me into the storing and selling business.  It can be tricky.  Is it a species and log quality that you can sell?  When you do it, the usual advice is to divide the logs first.  After the customer's logs are sawn, then you can decide what route that you want to take with your portion.

Personally, I saw for money, but others are very successful and comfortable with this arrangement.  The one instance in 12 years of sawing when I did saw on shares, it was a 50% deal on Cypress logs, and I needed Cypress lumber for my Cabin Addition.

Knothole Sawmill, LLC     '98 Wood-Mizer LT40SuperHydraulic   WM Million BF Club Member   WM Pro Sawyer Network

It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

mesquite buckeye

Splitting the logs before milling is a great idea. No issues with who gets what lumber at the end. ;D
Manage 80 acre tree farm in central Missouri and Mesquite timber and about a gozillion saguaros in Arizona.

Kansas

As others have stated, its strictly personal preference. We chose the inventory route, although we do a little custom milling. But there are so many dollars tied up in inventory. And when you have a bunch of inventory, you pretty well need help as well. We have to keep inventory on hand for customers making pallets, trailer decking and blocking, plus stuff for the kiln. Given what you have said, I think Magicman's approach would be better. Yes, you can make some good money doing the other. But it brings a pile of headaches.

Peter Drouin

Yes it can be a headache when you buy inventory :D :D

 


  

  

 
sometimes it don't end, when you start theres no going back :D :D :D :D :D 8) 8)
A&P saw Mill LLC.
45' of Wood Mizer, cutting since 1987.
License NH softwood grader.

millwright

I do about 50/50 but I am getting more and more into mobile sawing because of the inventory and storage problems.

Magicman

In no way do I mean any disrespect to any fallen sawyer, but there is a point where one can outgrow his market. 

For example if one sawmill is good then two would be better.  If an LT40 is good, then an LT70 would be better.  If I can sell green lumber, then selling KD lumber would be better.  I could edge faster with an edger, so that would be better.  If I hired a couple of more hands then we could be more productive and turn out more lumber.  When I am able to produce more lumber then I can easily afford the payments on this equipment and meet the payroll.   smiley_dizzy

Greed is colored Green for a reason.

Take one step at the time.  Grow your market very carefully.  Do not overstep your limitations.  Do not bet on anything that you can not afford to loose.
Knothole Sawmill, LLC     '98 Wood-Mizer LT40SuperHydraulic   WM Million BF Club Member   WM Pro Sawyer Network

It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

BBTom

I have a logger friend 5 miles down the road who owns a flooring shop and lumber sales floor.  I do most of his sawing and drying.  He makes most of the flooring when he is not logging.  When he is too busy in the woods, then I run the flooring.  Whoever has the time takes care of the customers.  I send people to him, he sends people to me.  We turn all the clear one face into lumber, the rest gets turned into flooring.  Our customers get excellent lumber and we get a good price for the #1,2, and 3 lumber when it is made into flooring.

I still do custom sawing both on site and at the farm and drying at the farm.  I have the ability to take logs and turn them into flooring for a customer to the tune of about $2/sqft.   

I make it sound so simple, but it has taken 5 years and a huge investment in machinery to get to where we are and we still have a long way to go to be making good money at it.  It is getting better, but the housing slump hurt us for several years.

There are so many different ways to go about being in the wood business that you could glean ideas for years and not have many repeats,  everyone finds their own way to do it. 
2001 LT40HDD42RA with lubemizer, debarker, laser, accuset. Retired, but building a new shop and home in Missouri.

WoodenHead

One other consideration is whether or not you are able to move the inventory you accumulate.  In many ways, sawing and shaping wood into lumber or flooring or whatever is the easy part.  Selling what you have is the other side of the business.  How easy is it to sell that extra wood that you are not using for yourself?  Everyone's situation is different.  What works for one doesn't necessarily work for another.

I've sawn for others in exchange for logs, but only if I needed what they had to offer.  Sawing basswood in exchange for some very nice cherry worked out fine for both of us.   ;)

   

Peter Drouin

Quote from: Magicman on April 27, 2013, 07:41:36 PM
In no way do I mean any disrespect to any fallen sawyer, but there is a point where one can outgrow his market. 

For example if one sawmill is good then two would be better.  If an LT40 is good, then an LT70 would be better.  If I can sell green lumber, then selling KD lumber would be better.  I could edge faster with an edger, so that would be better.  If I hired a couple of more hands then we could be more productive and turn out more lumber.  When I am able to produce more lumber then I can easily afford the payments on this equipment and meet the payroll.   smiley_dizzy

Greed is colored Green for a reason.

Take one step at the time.  Grow your market very carefully.  Do not overstep your limitations.  Do not bet on anything that you can not afford to loose.

But when your born with 0 ,working hard and taken a gamble to get ahead to make $, is the only way, just have to be smart about it, and if your not sure of your limitations, oversteping will let you know where you are,and I mean no disrespect to you MM   :)
A&P saw Mill LLC.
45' of Wood Mizer, cutting since 1987.
License NH softwood grader.

Ianab

QuoteBut when your born with 0 ,working hard and taken a gamble to get ahead to make $, is the only way

Arguably, if you have nothing, then it's easier to gamble it all.  ;) If you loose, you've essentially lost nothing....

It's when you actually have some assets is when you need to be more careful. Sure it's then easier to borrow money, against those assets, to set up a business. But by doing so you put those assets on the line if things fall over.

This isn't to say that you should never borrow money, just cover the "what ifs". Don't gamble more than you can afford to lose...

Ian
Weekend warrior, Peterson JP test pilot, Dolmar 7900 and Stihl MS310 saws and  the usual collection of power tools :)

Peter Drouin

Quote from: Ianab on April 27, 2013, 11:53:29 PM
QuoteBut when your born with 0 ,working hard and taken a gamble to get ahead to make $, is the only way

Arguably, if you have nothing, then it's easier to gamble it all.  ;) If you loose, you've essentially lost nothing....

It's when you actually have some assets is when you need to be more careful. Sure it's then easier to borrow money, against those assets, to set up a business. But by doing so you put those assets on the line if things fall over.

This isn't to say that you should never borrow money, just cover the "what ifs". Don't gamble more than you can afford to lose...

Ian


I know what your saying, but I pay cash for all my things, like the saw mill 36,000.00 in cash ,and if you don't  beleave me call Ross at WM in maine, the two john deeres where 75,000,00, and the wood lot I just got cash too, on and on, just my way, when you start with 0 cash is king, I lot of men it NH are that way

And no disespect to you  :)
A&P saw Mill LLC.
45' of Wood Mizer, cutting since 1987.
License NH softwood grader.

Ianab

No offence taken  :)

But if you can work hard and save $36K to buy a mill, good on you.  There is actually little risk involved. You own the mill, even if you park it in the barn for 12 months because the work dries up, or only saw on the weekends, nothing bad happens. You still have the mill, the bank isn't on your case etc

It's when you do have some assets and borrow against them that you take a risk. 

Case locally. a farmer had borrowed 2 million using the farm as security to set up an organic dairy company. It sunk without a trace, and of course the bank wanted their cash back. Foreclosed on the property, security guards, police, TV reporters all involved. But bottom line was that he put up the 5th generation farm as security on a loan he could no longer service.

You feel sorry for the guy, but he took some risks or bad business investments and paid the price.

Ian
Weekend warrior, Peterson JP test pilot, Dolmar 7900 and Stihl MS310 saws and  the usual collection of power tools :)

WoodenHead

No disrespect to anyone.  :)

I believe Peter is living out what Magic Man and Ian are saying.  Although still a gamble, paying cash is the safer way to go.  ;)  And things must be going well enough for you Peter so that you are able to come up with enough cash to buy a mill, tractors and bush.  When you don't know your market, then you need to be cautious.  Once established you can test your limits a bit easier.  ;)

A couple years ago in the solar industry when incentives were first introduced here, I knew I had the market and I wasn't afraid to routinely borrow $50k, $100k, or $250k.  We had the cash flow to handle that.  Changing our business to the wood industry my wife and I agreed that we would borrow nothing because of the risk.  We knew going in that it could be a really hard go.  The business would have to be self funding and grow slowly over time.  Borrowing can speed up growth, but we were not prepared to take the risk.  So far, time has shown that that was probably a wise decision.  It is taking time to develop and understand our market (and produce products that match demand).

It is far easier to come up with funds to purchase a mill (whether you borrow or pay cash) and saw for pay than it is to spend money on drying, storage, and possibly processing and re-coup your investment over long periods of time.  Some people do both. 

Magicman

Quote from: Magicman on April 27, 2013, 07:41:36 PMbut there is a point where one can outgrow his market. 

Take one step at the time.  Grow your market very carefully.  Do not overstep your limitations.  Do not bet on anything that you can not afford to loose. 
Peter, you seemed to ignore the statements that I made regarding taking risk.  No one should overstep their limitations in a way that would bankrupt them.  Too many notes on too much equipment and too many employees to pay can surely do that.  My point was to grow to your market.

We have seen fallen sawyers here on the FF that overgrew their markets, but we also have many who are successful by meeting their market head on.  Successful businessmen never bet more than they can afford to loose.

Knothole Sawmill, LLC     '98 Wood-Mizer LT40SuperHydraulic   WM Million BF Club Member   WM Pro Sawyer Network

It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

red oaks lumber

i must be lucky,based on what you guys are saying.the way i veiw things you cant establish a market unless you have something for that market. kinda like you cant rent hotel rooms without having rooms first.
if you are going to sucseed in your market, think beyond your neibors think the next town over and beyond.with reward comes risk. don't be afraid :)
the experts think i do things wrong
over 18 million b.f. processed and 7341 happy customers i disagree

lyle niemi

Quote from: red oaks lumber on April 28, 2013, 10:50:11 AM
i must be lucky,based on what you guys are saying.the way i veiw things you cant establish a market unless you have something for that market. kinda like you cant rent hotel rooms without having rooms first.
if you are going to sucseed in your market, think beyond your neibors think the next town over and beyond.with reward comes risk. don't be afraid :)
That's a big 10/4! 8)

Magicman

Nothing is a one size fits all.  Take the term "market" back to the OP and the original questions asked.

The fact that there is an active thread concerning a failed sawing venture (for whatever reason) prompted my remarks about not outgrowing your market with borrowed money.
Knothole Sawmill, LLC     '98 Wood-Mizer LT40SuperHydraulic   WM Million BF Club Member   WM Pro Sawyer Network

It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

Peter Drouin

Quote from: Magicman on April 28, 2013, 08:35:02 AM
Quote from: Magicman on April 27, 2013, 07:41:36 PMbut there is a point where one can outgrow his market. 

Take one step at the time.  Grow your market very carefully.  Do not overstep your limitations.  Do not bet on anything that you can not afford to loose. 
Peter, you seemed to ignore the statements that I made regarding taking risk.  No one should overstep their limitations in a way that would bankrupt them.  Too many notes on too much equipment and too many employees to pay can surely do that.  My point was to grow to your market.

We have seen fallen sawyers here on the FF that overgrew their markets, but we also have many who are successful by meeting their market head on.  Successful businessmen never bet more than they can afford to loose.



and I agree with you MM 100% when you borrow money,grow in to your market, I was not ignoring what you said just trying to show the good people of the FF the outher way with cash, to me is best,
no disrespect to you :)
A&P saw Mill LLC.
45' of Wood Mizer, cutting since 1987.
License NH softwood grader.

Magicman

And I took no offense.  I am also a cash man, but since I am also retired, I take a more cautious pace.  I may even overemphasize that pace.  I have seen many businesses fail due to not recognizing the pitfalls of borrowed money and paying labor.  Weather related or affected jobs can expect periods of no income. 

It is wonderful that new sawyers have the FF so that they can get so many different prospective views from so many different sawyers that have been in the trenches and learned by trial and error.  I could have avoided some mistakes during my earlier years of sawing.  Thankfully during those years I was growing a business and establishing a nest egg of working capital that would sustain me through any breakdowns, etc.  I paid myself back twice for the sawmill before I took any income for myself.

I have noticed a couple of members recently stating that they were  "hanging it up" or considering selling their sawmills.   Sawing business is not always easy or economical depending upon where you live and the lumber restrictions that local regulators place on "rough sawn" lumber.  There can be many pitfalls to establishing a new business.
Knothole Sawmill, LLC     '98 Wood-Mizer LT40SuperHydraulic   WM Million BF Club Member   WM Pro Sawyer Network

It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

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