pricing?

[caveman]

We are going to be sawing customers' logs for the first time in a while.  I was planning on charging $125/hour for cedar and other lower yielding logs and $0.45/hour for decent logs.  This will include John and me working, an edger and all of the support machines.  We saw with an LT 50 with 47 hp Yanmar.  Does this seem reasonable?  

I've been sawing dunnage lately.  The live oak dunnage that I delivered today had my truck in Carolina Squat mode.  It is much heavier than pine and red oak.

[Old Greenhorn]

45 cents an hour seems a tad cheap to me. Just sayin'

[KenMac]

Don't forget to charge for any blades damaged by foreign junk in the log.

[WV Sawmiller]

Cavey,

    I just suggest you are crystal clear to the customer which is being sawed at an hourly rate and which are being sawed at a bf rate and that he agrees before you ever start sawing.

    Also how do you calculate your rates? Is the hourly based on the hour meter off the mill or the time your arrive/start? Is the bf sawing calculated on actual yield or from a scale estimate of the log before sawing it? 

   All methods are okay as long as the customer understands and agrees before sawing.

   BTW - what are you doing about milage? I charge a per mile rate one wat for each trip/ Some charge round trip. Just be clear before starting. 

   I used to just charge one trip if I had to leave the mill for a day or two then I found the customer would get down to 1-2 small logs and say "I'm give out. Lets finish them two tomorrow." Now I tell him okay but he'll have a second milage fee and lots of times he'll say just go ahead and finish them now.

[doc henderson]

If I charge at all, I suggest 100 bucks and hour from arrival to pulling out.  this includes education on stacking and loading and unloading logs and lumber.  that is for the folks who can afford it, and I do not know them as friends and or from work.  many offer a tip.  I have some friends that hand me some cash on occasion, like every third time we mill.

[NewYankeeSawmill]

I decided on charging flat-rate of $50 by the hour because so many of the issues affecting performance are outside of my control (in my situation). If I could control more factors on the jobsite, I would consider a different business model, but I'm doing this to make money, not friends (it's nice when your customer's like you, but...) The Friends-and-Family rate is different, but customer's off the street pay by the hour from when I arrive on site (+/- a few, I round to nearest 15 min mark), to when I finish attaching the mill to my truck. If I screwed up as mill operator and we have a problem, change blade, etc., I stop the clock. If I'm standing around waiting for the customer to do whatever... the clock is running. I include 1-hr radius travel time, anything over is billed as extra at hourly rate ($50/hr).

This is a business operation, not a charity, you hired me at agreed upon pricing - you don't get to complain about the bill when it shows up.

I'm not trying to screw anyone over, as all the others suggested, a clear understanding by both parties is important! That's why I like to do meet-n-greets with new customers that don't demonstrate prior knowledge over the phone. It takes a half-hour of my time I don't get paid for, but afterwards everyone is on the same page, and I don't have problems down-stream.
That is something I've found important to having successful interactions with my customers, more so than the yield of lumber I'm producing. I think that is due in large part b/c of the customers I am getting? Most were turned down by other sawmill operators (b/c they're not good logs, too small of a job, etc.) In other words I take all of the junky work you guys turn down. ! If I billed by the BF I'd get killed. That is also something discussed at the M-n-G.
I tell customers the Woodmizer guys getting $125/hr can out produce me 4 times over.
They all tell me the same thing: Yeah, I called, none of them would take my job! 

[Peter Drouin]

I get 150.00 an hr for special stuff. .65 a bf for the rest. 
And you bring the logs to me.

[taylorsmissbeehaven]

I charge .45 cents bdft for good clean SAW logs. Everything else is $125.00 per hour. From the time I start till the time I am done.  Especially if we are at my yard where I am using all my support equipment. As long as all parties understand and agree it all works out. If the customer is new and willing to pay for it, time gets spent helping show proper ways to stage, handle, and stack.  

[YellowHammer]

If you are sawing off site, I would charge by the hour, as that penalizes slacking customers and takes into account dead time.

When sawing at you own place, then I would charge by the bdft, as that rewards you for sawing fast and more efficiently and you make more money the faster you go.  Say for example you are using your LT50 and if sawing 300 bdft per hour real yield (I just picked a number), and then have an efficiency "moment" and boost to 400 bddf per hour, it matter nothing to the customer, they still get the same price per bdft, but you just increased your own pay by 25%!  Just for being smarter and Taking Steps to Save Steps.  I would also use that as a way to cull garbage logs or pecker logs "I don't these, it's a sawmill, not a pencil sharpener" - and I always had a "chainsaw charge" that was levied if I had to turn the mill off and fire up a chainsaw to trim their limbs off.  I would tell them, "I'm a sawmill, I mill up logs, and Logs Roll, these don't and I will not cut them.  Trim the limbs, and turn them into logs, or I will charge per hour to fire up the chainsaw, 1 hour minimum charge, $75 per hour, or you do it...."

I also loved people who had trailers, I would ask them to leave them, and I would back them up to the outfeeld table and use my dragback shoes to push the boards directly onto the trailer, just like on my videos where I can cut a whole log without touching the cut boards and stack them on the table, I learned that doing the same thing, except dropping them right on the customer's trailer.  "Look, no hands!"  Talk about improving bdft per hour!

The going rate around here is $1 per bdft.
 
 

[doc henderson]

I will also remove some time if we are shooting the crap and having a great convo about our families etc.  Many round up a bit and just think it is neat to watch their logs turn into lumber.  I am hoping to at least offset some cost for the mill, for work done for acquaintances.  Vet discount often 100% discount as well.  I am a hobby guy.

[SawyerTed]

caveman's rates should be about right for sawing in his yard with his support equipment.

Remember WV Sawmiller's saying, 

"You can shear a sheep many times but you can only skin him once."   

[Resonator]

In general the biggest factor for setting your rate would be what the going rate is in your area. And if you have a higher rate then your competition, you can demonstrate to your customers that you provide a better quality job for their money.
I bill strictly by the hour, and only saw logs brought to me. I have a minimum rate for 1 hour of sawing, and then adjust my rate for the overall size of the job. Reason being I am a "one man band" working by myself. And on large jobs there can be a lot of time log handling and lumber stacking, versus time running the sawmill. 
My policy is every board that comes off my mill goes on stickers, whether it's low grade pulp poplar or veneer grade black walnut. Often the customer can't pick up the lumber for days or weeks later, and this ensures it won't be growing mold while in my possession. On some occasions lumber is whack stacked loose on a trailer per customer request, but not often.

[caveman]

I appreciate all of the input.  The cedar customer called me last night and acted like our price for sawing was too high.  When we do hourly work, we work like we are the ones paying for the service and do not charge for "shooting the breeze" and rarely charge for loading or unloading.  Generally, we come out better sawing by the BF than we do sawing by the hour, but with several small cedar logs and all being at least one live edge, calculating BF would be time consuming.

WV, I do not charge by the engine hour.  It is the same charge regardless of if we are moving logs, running the chainsaw or anything else related to the processing of their logs.  We have added a lot of equipment and even a little knowledge/technique since we began with the manual LT-28.  My goal is to always have a customer feel like they got a very good product at a very good price, while still making enough money for it to worthwhile for us- We could be fishing this morning instead of sawing.  I retired back in June, and I cannot remember the last day I did not work and just took a day (between the hurricanes, the week with the forestry team, work around the home front, the mill and my parttime job).  

[customsawyer]

I don't think the going rate in your area should effect what you charge. The biggest factor should be your operating cost and how much you need to make. I charge more than most in my area but I provide a lot more services. I've had a customer bring me logs from as far away as New Orleans. Granted he was also bringing shrimp up for a local restaurant too. 
I charge more than most in my area because my cost are higher than most. I don't know of any other small mill in my area that carries the insurance and such that I do. I couldn't even turn the mill on for 45 cents per bf. and I'm not going to do this much work just to break even. I start at 60 cents per bf if it's just dead stacked at the end of the mill. I add to that cost if I sticker or anything like that. If I can't provide a value to the customer than I send them down the road. Now that value might be measured in different ways. Cost and quality being the biggest things to measure.

[jpassardi]

Although my mill is for my use and not a full-time business, I definitely agree with what Jake says above. If you're not getting fairly compensated for labor and all your equipment used, it's not good practice to take on the job. -unless it's a favor for a friend.

One thing to consider is mobile vs on your site. If mobile and you have a tailgunner, you can likely provide a lower BF rate. You're also likely not providing your machine with forks, edger, etc. Conversely, with mobile you are fully justified to charge for travel.

[Sixacresand]

People with sawmills and equipment have lots invested and have specialized skills.  They should certainly be paid.  Yeah, I will saw a log for somebody for $50 plus a blade for metal strikes.  But for a tractor trailer load, my aches and pains refer them to professionals like Jake.  

[caveman]

The fellow we sawed for this morning was happy with what we sawed for him.  I did tell him that our price per board foot sawed is going up.  We ended up trashing two blades on metal in his logs and took out a B56 and a B56.5 belt when I tried to continue cutting to escape the log with the blade with damaged teeth.  He paid for two blades.

[customsawyer]

When you are setting your prices, remember to use replacement cost. Not what you paid for your machine. Right now to replace one of my LT70s is over $85,000.00
I get hired to use my excavator on occasion. The customers don't blink when I charge them $250.00/hr. for around a 200K machine. I have over a million in my sawmill equipment and they think I should be sawing at $85.00/hr. The math doesn't work.
My insurance just keeps going up every year. It is now costing over 60K/year for all the different insurance. That's 5K/month right off the top. You have to charge enough to cover all of those expenses. Lots of guys don't carry all that I do. That is just fine but I'm not going to risk everything I have worked for. I've had customers trip and fall while getting off of their trailer. Guess who would have been sued if they wanted to. I have to much invested to risk it on some other guy having a better lawyer than mine.

[SawyerTed]

It's hard to tell others how to price because every operation is different.   Expenses are different and end goals are different. 

While I'm in the business I'm not in business to make a living.  My business is a side gig.  I am in business to make a profit and won't operate at a loss if I can help it. 

With that said, mobile sawing is different than stationary as is rough cut production is different than kiln dried molded products. 

So it's hard to price others' work without knowing about the operation, the machines involved and the end product.  Even customer expectations can create differences . 

[Magicman]

I just finish a job yesterday sawing 6633bf in 17 hours.  That was 390bf per hour which equates out to $175 per hour.  That is why I can not saw hourly rate.  If I quoted that rate, my phone would not ring and the sawmill would be parked, but customers do not hesitate when I quote my bf rate.  

I am content with my bf rate because it is just me and the sawmill; no support equipment nor labor.  I am not selling anything but my sawing service.  I figure 1/3 for me which is over $50 per hour, 1/3 for the sawmill which includes fuel/maintenance, and 1/3 for taxes, insurance, etc.  I maintain a tidy sum in the sawmill account to cover any possible catastrophic failure.

[YellowHammer]

Do you know what you get if you set your price too high? 
A few whining customers, and if you do good work they will pay and you will stay in business. 

Do you know what you get if you set your prices too low?  The exact same thing, a few whining customers and if you do good work, you go out of business.

[Stephen1]

No one minds paying for quality! 

[CCCLLC]

Well said Y.H.