Who's making Money with a sawmill

[woodsteach]

Stumpy I like your answer.  "never confuse revenue with profit". 

Start with a business plan and continue to work your plan, and continualy refine your plan. 

Right now my mill is making the mill, trailer, truck, and skidloader payments, so there is revenue but I'm working for 'free'.  But man I like doing it.

Woodsteach

[SwampDonkey]

I was talking with a local guy here and he's selling his mill. I think it's a swinger and he hasn't had it long. I don't think he sawed enough to pay for it. He is a logger and I was wondering when he bought it, if he'd make out with it. As I said in another thread, these guys in my area are 30 years too late. Not only did folks use alot of there own milled lumber back then for building sheds and barns, but our average piece size was bigger and our woodlots weren't mostly clearcut. When everyone went from horses to skidders they had to clearcut everything to keep payments. And now it's even worse with these $250,00 processors. I know some guys cutting 7 days a week.  :

[jpgreen]

Well when I say "Making Money" I mean profit.

If you aren't making a profit, you ain't makin' no money..  ;)

[Tom]

Things must be getting tough around here.  My customers don't charge me near as much  to cut their wood as they used to charge.

[jpgreen]

 :D

[ARKANSAWYER]

  I make the bulk of my money from sawing.   The problem with custom sawing on the road is it is not a 5 day a week 50 week a year deal.  Some months I spend the whole month on the road sawing for others then sit home for 6 weeks.   So I saw logs I bought or logged and sell the lumber.   Sooner or latter the two will clash.   You are to be on the road and folks are a calling with orders and have cash in hand.   So I come in at dark and put Wanda under the shed and turn on the lights and saw till 11 pm.   Then up at 5 am fold the mill up and hit the road again.
  Once I expand and put in kilns and everything I wished I could get a guy who could go portable and when not on the road saw at the yard.

[highpockets]

Arkansawyer how far do you work from home?  I been up in your country years ago working and have fished out of Cotter or Yellsville.  Just wondering if you do most of the sawing locally.

[Bibbyman]

Mary has been running our sawmill business for a number of years being her major income source.  I took early retirement in July of last year so we've both been full-time in the sawmill business since then.  We've not starved yet and things still look like there is no end to the business coming in.

We get most of our income from custom sawing.  We also market lumber to local folks plus we've got a couple of commercial places that buy our lumber for resale. 

We do have an inventory of kiln dried hardwood lumber.  But we're not nearly as active in that area as we were.

Arky is pretty good with his math but what he doesn't tell you is that every step of the way from green off the mill to kiln dried lumber going out the drive in the customer's PU there is some loss and degrade in the lumber.  What you put is ain't what you get out.  Plus it takes six months or more to turn green lumber into kiln dried lumber and you got to handle it a couple of times – if you're doing the drying yourself.

Then again,  you've got to have a customer before it's worth anything.  And you've got to have what they want and enough of it.  So what if you've got 10,000bf of kiln dried lumber in stock but not what your customer wants?  Add that up... You've got a building tied up with all this lumber waiting for someone to come and give you money for it. We've got inventory dating back 10 years. 

We've had another queer deal come to bite us on dried lumber...  Our lumber was dried by a commercial heat type kiln operation.  But some people won't buy it because it was not dried by a de-humidification kiln process.  They say heat drying makes it too hard to work.  Then you've got others that think it should be at a specific moisture content.  It may have been that the day it came out of the kiln but it may be more or less after it's set for any length of time. And will be different when the user puts it in his shop for a few days and then different again when it's built into furniture and put in a house.  But there's no telling a customer that because the customer is always right.

Another problem we have with our kiln dried lumber sales is... it takes so much DanG time dealing with each customer.

I told someone the other day our sawmill business was like a gold mine – you got to move a lot of rock and dirt to get to it.

[leweee]

yes sir re....theres gold in them thar hills.....it's just mixed in with a lot more dirt these days ;D

[Bibbyman]

Another bunch of B.S. that you run into in the kiln dried lumber business is the prejudice as to where the lumber came from.  A couple of examples..

We sell cedar to a furniture maker.  He uses far more oak and walnut and other hardwoods than cedar so I asked him if he was interested in buying some KD oak or walnut.  His answer was,  "We only buy northern oak out of Indiana. The stuff we grow around here is no good." I said,  "Do you know where we ship our grade lumber."  He paused, so I added,  "A lot of it goes to Indiana."  He said noting.  I guess I didn't win that argument as he's still not buying any KD lumber from us.

Just a couple of months ago the broker brought through some really nice red oak logs.  They'd come from down on the Arkansas border.  Do you know where they went?  To Wisconsin.  I bet someone will be buying true northern (Arkansas) red oak this spring.

I've ran into the same problem with basswood.  Only basswood from the Great Lakes area is soft enough to carve, etc.  Baloney!

There is a farmer/carpenter that lives near us that has as good a stand of timber on his farm as you can find.  I know because my dad cut the timber off of it before the highway construction.  Back in the 60's the new dual-lane highway bypassed though the backside of his house and cut a swath though about 20 acres of some of the nicest white oak around.   

Then again about 5 years ago they put through a 3ph power line parallel to the highway and cut another swath through this stand of white oak.  He had some of it logged but he brought some of the logs over to have sawn into fencing lumber. 

For some reason we ended up delivering the fencing lumber back to him. We unloaded the lumber next to his new woodwork shop he'd built as there he was going to build a new fence.  He invited me in to see his really nice large new shop. 

There was a stack of about 300 bf of KD oak setting there.  I asked him where he got it and how much he paid, etc.  He told me.  I asked how come he didn't buy KD lumber from me..  He said. "We don't have good the trees around here to make good cabinet lumber."  I said, "Do you know we've sold lumber to that company for years. And that some of the lumber in our stock has been dried by them?"  We talked about that and he says,  "But they know how to grade out the bad stuff."  We sorted through the stack and found it a pretty common mix – some being pretty much junk..  The fencing lumber I brought to him would have graded out much better than what he'd bough. 

I lost that argument too.  I still saw for him, his brother and son but he's never bought any KD lumber from me.   I even suggested that he cut a couple of his own trees and we could saw them into grade and he could take it to have it custom KD.  Nahhh...  Too much to bother with.

[ARKANSAWYER]

   Yep! the basswood from up North is way better.   So I got some for my customers.  Northern White cedar is better as well.   So I got some for my customers.   Good Southern basswood is $1.25 a bdft and Good Nothern basswood is $3.25 a bdft.    I sit it up on the pile and tell them the price.   They ask which is which?   ???  "Don't you know" I ask.   "After all I had it brought in because it is so much better so it must be different because the price is different."   They pull out their pocket knife and take a sample cut and 7 out of 10 times they take the Southern basswood.  It's a 50/50 chance but the Southern wins most times.
  Put the Northern white cedar up to my Eastern red and I still have Northern white cedar that I traded for 2 years ago at the piggy roast.  It is better when you do not have it.
  But when you do sell one you get better money for your investment even if you wait 10 years to sell the board.   I can double my investment on oak even if it takes me 5 years.   Show me a CD that will do that?   If I get 3% on my CD how many years will I have to wait to double my money?

  I travel up to 75 miles from home most of the time but have been to Little Rock, Memphis, north of Springfield MO and once spent the whole month at a sawmill 35 miles away sawing for them.

[brdmkr]

   Yep! the basswood from up North is way better.   So I got some for my customers.  Northern White cedar is better as well.   So I got some for my customers.   Good Southern basswood is $1.25 a bdft and Good Nothern basswood is $3.25 a bdft.    I sit it up on the pile and tell them the price.   They ask which is which?   ???  "Don't you know" I ask.   "After all I had it brought in because it is so much better so it must be different because the price is different."   

I like that :D!  I don't have a kiln (yet), but the only lumber that locals appear to like from this region is SYP and eastern red cedar.  All of the 'Northern' hardwoods seem to be superior . 

[TexasTimbers]

Alot of great advice. I don't know about having to be around for alot of years though in every locale anyway. I am in no postion to sell lumber yet I am getting asked not daily, but nearly. Of course this is a close-knit rural area.
Last night I got a call from my Internet provider. He's was a friend long before he became my provider. I get my internet from his microwave tower about 15 miles away at his house. Just for giving him enough of that sweetgum to make a 2" X 30" X 7' bar top, he's giving me free service for a year That's a $600 trade for 35BF of wood. I don't know what sweetgum is a BF but I doubt it nearly $17 green.
I warned him it was going to tear itself apart but his wife insisted. He is a woodworker and say he'll let  dry in place and finish when it reaches EMC.
Anyway, I keep thinking one day I will actually have to go into the sawmill business. I love doing it more than anything except possibly building furniture, I just am afraid to turn it into a business for fear of losing the love of it.

[Larry]

Just to set the record straight.  Quality basswood is only found in NORTH Missouri.  Just take a look at that creamy white smooth textured log to your left.  Sure ya can cut some of that southern basswood with a knife...just wait till you put the router to it and watch the fuzzies pop up.  :D :D :D :D :D  Shoot, I can even put a little more spin on it and tell ya I intelligently dried it in my solar kiln to maintain the white color and smooth cutting properties.

Reality check...few weeks ago went to a school taught by the NHLA Chief Inspector.  The topic of what regions supply the highest quality wood came up.  Found out it is a lot more spotty than I ever imagined.  It was even mentioned that there are some small pockets in Arkansas that the best red oak in the nation comes from. ???  Guess good wood is where you find it.

The biggest problem I see with selling kd lumber is you still need a market for the low quality stuff...and sometimes that is tough to find.  Like Arkie said while back "Finding markets is sometimes harder than finding logs".

[Tom]

Our Bass wood is, apparently a lot different than Bass wood y'all have way up north.  Ours is real special and the carvers don't have to spend much time with it to get it the way they want.  The little limbs can be clipped off real easily and some folks even use a side grinder to grind the little butts down smooth.  The sections are fairly long and join with little humping.  The stuff is pretty doggone strong.  It root sprouts but not out of one little spot.  You can find it coming up all over in a few years.  The hole up the middle is fairly small too.  That leaves a lot of backbone on the outside.  We lacquer it a little, tie it to a string on the little end and a hook and worm on the other and it's ready to go.  Yessir, I'll take southern Bass wood any day over Northern Bass wood.   That Northern stuff won't catch fish.

[DanG]

Who you trying to bamboozle, Tom? ;D :D :D :D

[Luckyfarmer]

Oh Bibby, your post brings back so many wonderful memories.  I bought furs for 30 years and one time I had 600 grey fox.  I had Loren Lamb in Iowa ship 300 for me to Hudson Bay.  I sent the other 300 from home.  Lamb sold his for 3 dollars more than I got.  I called and ask why they gave him more than me.  He informed me that Iowa fox were better than Mo.  they all came from New Port, Ar.  I didn't know lumber was graded that away also...I will have to remember this...Thanks

[ellmoe]

Tom, there you go, persflaging again!  ;D

Kingfish ;)

[woodmills1]

Ive got some trees that show grow lines for the last 60 years only a pencil line each, and have been told that doesn't mean any thing. :D  Yet those old grow sinker salvage logs are prized for their tight growth lines.

ya really want to get into a pis***n contest about air dried wood go take a peak at that other forum doctor wise.