Lessons learned by a new full-time sawyer

[NRFarms]

I feel like for the past 2 years, I have used more data searching the Forestry Forum than any other website as I went from a total newbie sawyer to a total newbie sawyer that wanted to do this full time. Like I said in my intro post, I needed to figure out what to do when I got out of the Army-I landed on sawmilling. There has been a major adjustment from wearing a uniform and getting a government paycheck, but I wouldn't trade it for anything. This may be a bit long-winded, but it may prove useful to some. I write this like I'm writing instructions to someone else-in all reality I am talking to myself the most.
 
I just hit 5 months in business, and while to many on here (some of you are my business role models having never met you or even seen your face) that is a drop in the bucket, I figured I would share a few things that I've learned along the way so that others who are thinking about doing this have another tool in their preparation tool belt. We've been fairly fortunate so far, even being in an area that isn't known to have a lot of money. I won't claim the credit-the Lord has blessed us greatly. Please don't take this as a victory lap or anything, I just know I was craving things like this when I was thinking about jumping in head first. Some of these lessons were learned easily and some were harder and some I'm still learning. If there is a better topic to post this on, I'm sure somebody with let me know...
 
On Business
I had ordered a Cook's AC-36 mill in January with an estimated delivery date of the end of June. I was ready to get to work full-time on this in April, so I was a bit antsy to get going. That April-June time was the biggest blessing. It gave me time to get my business in order, literally. Here are a few suggestions.
 
1. Take the time to get your business registered, properly insured, bank accounts open, and any timber or other licenses secured. It's not very hard.
2. Get your books put together. I found an accountant that I planned to work with and talked to him about being a client for taxes. From there, I asked how I should set my books up to make his job easier and went from there. The first few months or years will have a lot of startup expenses and other expensive purchases, so not taking the time to organize your books is literally costing you money. If you find yourself looking for a loan, somebody is going to want to see a few different spreadsheets to understand how they are going to make money by giving you money.
3. Figure out your risk tolerance. Take enough risk to put yourself in the position where you see yourself realistically thriving, but not enough to bury you if things go south. My wife and I decided that we didn't want unsecured debt so that we could sell all of our sawmill related equipment and switch paths without a lot hanging over our head. Who knows if that's right or wrong, but it is what we chose and we're sticking to it.
4. Create a business plan. Get feedback. Edit it. Get feedback. Edit it. Get fe....you know where I'm going. Be ruthlessly critical-no rose colored glasses. I have a habit of that sometimes. Revise it when appropriate. Don't stray far from your mission unless you had a bad mission in the first place. There is a difference between being flexible and being a spaghetti noodle. You'll drive yourself crazy shifting gears all the time, so stick it out for awhile before you decide to change drastically.
5. Put together a pro forma to go with your business plan. The hard thing about a pro forma is you just want to start plugging in higher number (more board feet sawn, more board feet per hour, more hours milling due to efficiency upgrades), but it is hard sometimes to show a pro forma based on quality upgrades. I'm finding that my niche is mostly quality and partially quantity-my pro forma was based around getting more equipment over time to increase quantity. Turns out I'm not all that interested in that, but maybe you are.
6. Be ridiculously honest. About everything. Don't start over-promising and get a bad reputation early on. People like honesty.
7. Figure out your costs. Get way down in the weeds and figure out how much this work is costing you. Don't leave anything out. DO NOT WORK FOR FREE. I have no intention of taking more than I deserve of people's hard-earned money, especially in this rough economy, but I can't work all day and make the same as a Lowe's cashier-I have a lot more risk to cover than him. Something has to hold you through the bad days when you don't have customers looking to buy your goods. Friends and family discounts and hard-luck stories could be what keeps you from being able to put food on the table. Know when to be charitable and when to hold the line. Holding the line is a bit more important when you're starting out even though you feel like you need to "buy" business by giving great deals to get people in the door. A little of that is ok, but mostly that is a good way to go broke.
 
On Marketing
Everybody comes on here to read cool things about lumber and equipment. Marketing is boring. Well, once you have name recognition, word of mouth, and years in the business-no need to worry about this. If you're the new kid on the block (especially if there are other kids on the block), you better figure out how to market.
1. Get business cards. Take the time to get them right. They still work really well. My first round of cards had a logo and some contact information. They didn't stand out and they didn't explain our services. The next round did. And the quality was improved. You wouldn't believe how many more calls I got from people saying they saw my card after I made the switch.
2. Get on Google Maps. Heck, you don't need to have open hours or anything, but when people get on Google Maps and type in "lumber", or "sawmill", or "custom lumber", you are probably going to get a call. It also helps people find you when you have orders to be picked up. People get on Facebook to be entertained and on Google Maps to buy.
3. On that note, Facebook. We have gotten an enormous amount of notice in a short period of time by using Facebook. I turned the messenger option off after a few weeks because I was putting together quotes for dozens of people and none of them bought anything. Waste of time. I think I have sold more lumber to people that don't have Facebook but were shown our Facebook page. Like I said, people get on Facebook to be entertained. I put stuff on there almost daily, since it requires minimal effort to reach a broad audience. If it sticks, awesome. If not, who cares.
4. Shake hands a lot and make every effort to go talk to anybody that you think might buy lumber. Eventually it will pay off.

On Sawmilling
1.What is your log source? I'm in West Virginia. We have a lot of trees. A lot. I heard quite frequently that sourcing logs would be the biggest issue. That was my biggest issue, until it wasn't. I made so many connections in a short period of time to buy logs that I spend all day turning logs down. But it was sooooo worth it. It is awesome to have at least a dozen loggers on speed dial and dozens of tree services and landowners to have my pick of the litter on logs. I get exactly what I want each time I call. My secret has been paying more. Read #2.
2.I don't cut ties and flooring, and other commercial commodity lumber here at the mill. I wouldn't enjoy it and in my local market, I couldn't make it-I have too many inefficiencies compared to my large mill brothers nearby. I sell green lumber at retail costs. I pay about 15-30% more for logs (species, sizes, and grades that I want) than every mill nearby, so that when I call for logs, I get them. I also don't have very much overhead, so I usually break even in the first few days of the month, and then after that, it's all about operating expenses. I don't sell lumber for the prices listed in the Hardwood Market Report, I sell them for my costs plus a reasonable margin based on a few different factors. Don't get super panicked by the HMR prices if you're goal is selling retail-none of your buyers subscribe to it, they probably aren't buying tractor trailer load quantities, and they probably don't have many options to buy the kind of lumber that you are selling. I'm not saying to take advantage of them, but don't compare your prices to the mill next door that is cutting 40 MBF per shift and sending it to the flooring plant.
3.Figure out your mill needs. Like I said before, I planned to be the community sawmill-sometimes that means cutting a barn's worth of siding, or a log home, or a handful of really nice Cherry boards. A even mix of quantity and quality. I started with a manual mill when I was doing this as a hobby. A Timberking 1220. It was a neat little machine that I kept improving to make it better. Being an engineer at heart, I tracked every second of my time that went into milling a log. From there, I determined which upgrades would statistically produce faster yield. What I determined was that I was going to be crippled if I tried to production saw on this machine regularly. I took that "efficiency audit" that I did and started comparing getting a new or upgraded mill. The things that were the most important to me in my mind (cut width, log width, throat depth) were not as important as some other things for my niche (horsepower, hydraulic speed, length, dragback) according to my "efficiency audit". Here's Why.
4.Invest in the right mill up front. I decided to order a Cook's AC-36, and I got almost every option with it. My only regret is not getting every single option with it. The machine that could produce the most amount of accurate lumber in a set-up that allowed for me to play multiple roles was the machine I needed to get. I could go on for awhile on why I chose the Cook's, but we'll save that for another time. I'm a one man show. As fun as milling is, I only ever planned to actually mill for 16 hours per week. All the rest of the time would be doing everything else -unloading logs, grading logs, edging boards, stacking lumber, cleaning up, marketing, accounting, etc. Turns out, that has been about right. The 67 HP Yanmar Diesel engine will eat wood faster than I can deal with it, and it is awesome. Not a single part of me thinks " I should have gotten a smaller HP motor." I wanted a mill that I could continue to grow into as I improved my material handling situation behind the mill. Do the math on this real quick. Last month, I produced about 15,000 board feet of lumber. I put 5 gallons of diesel in the sawmill to get about 2,500 board feet. With fuel being $3.35 here for off-road diesel, I spent about $100 on fuel. Similarly, in my Timberking 1220, I would burn 5 gallons of gas milling about 700 board feet. If I tried to mill that 15,000 board feet with that mill, with gas being $3.35 here also, I would have spent $360. It also would have taken me about 8 times longer. I put a sizeable down payment on the Cook's mill and I pay about $1,000 a month on it. Between less breakdowns, lower fuel costs, significantly less pain each morning when I wake up, and wildly faster production, I don't have any issue finding that $1,000 each month. I usually find it in the first few days, in fact. Bigger isn't always better, but smaller isn't either.
5.Get an edger. I bought a Cook's edger barely used before I got my mill delivered. You know, I think I could produce a pretty comparable sized stack of lumber with my little mill and that edger than I could produce on the AC-36 if I had to edge the boards by hand. It is one the biggest things that will set you apart from the backyard sawmill. It makes you a pretty legit operation for not a huge investment (compared to buying a new mill). The quality of boards you will produce also is elevated to a whole other level. When I need super straight 2x10 boards for a customer, I cut them 2x10.75 and run them through the edger, trimming any stress and minor bandsaw errors off. The customers around here are floored by how accurate our rough-cut lumber is. Yes, I would be more efficient if I had a helper all the time on the outfeed side or a board return, but even walking back and forth every 2-3 boards will let me edge about 600-1000 board feet in an hour. Wayyyyy better than stacking them on the mill.
6.Put more time into planning and executing your material handling situation that any other aspect of your business. In my best week by myself, I have milled an average of 500 board feet per hour in a 16 hour week. 8,000 board feet of lumber can quickly become plenty to deal with if you're not careful. Build really accurate pallets. Build pallet racks. Build sticker bins. Build sorting tables. Build a bins for small wood cut-off pieces. Cut 20 times more 4x4s than you'll ever think you'll use. Cut 100 times more stickers than you'll ever think you'll use. Think about where you can build more covered drying storage in the future. I don't have enough of any of the things I just listed. I try to dedicate time each week to making some, but it still isn't enough. Try to take time weekly to see where your processes can improve and then go after it. Everything within site distance is on a 42" long pallet, even tools and stickers. My stickered lumber packs are 42" wide by 42" tall. Since my forks are 42" and a common trailer width is 84" for dump trailers and car haulers, everything around here is 42 inches.
    
7.Plan for waste and see how to capitalize on it. I don't have electricity here yet, so I don't have a dust collection system. Oh how I yearn for it... However, I placed the mill about 75" from my building posts. My loader bucket is 72". I scoop out the building about every 2 days of hard milling and have plenty of farmers waiting for it. I charge $20 to load their trailer. I'd like to put in a dedicated sawdust building, and then I'd probably charge a bit more. But nonetheless, I can make somewhere around $80-$160 a month selling green sawdust. Remember my diesel costs in #4? It all helps somewhere.


I could probably go on for days. I don't know everything-I don't even know much! These are just a few things that I have picked up in a short time. Nothing I said is the gospel and there is already a wealth of knowledge here, so feel free to disagree with any and all of it.

[East ky logging]

That was one of the most well written post I have ever read. That should be required reading for anyone that is thinking about starting a sawmill business. 

[KenMac]

AMEN!

[NRFarms]

That was one of the most well written post I have ever read. That should be required reading for anyone that is thinking about starting a sawmill business.

What a complement. I'm glad you found it useful, sir.

[beenthere]

Nice pics, but don't see them in your gallery. Or am I missing something? 

[NRFarms]

Nice pics, but don't see them in your gallery. Or am I missing something?

You're not missing anything. I am. I didn't realize that was even a thing. I'll work on uploading some.

[DDW_OR]

New mill first day tips?
https://forestryforum.com/board/index.php?topic=124930.msg2041659#msg2041659

[YellowHammer]

Very good and well thought out post! 

[Wlmedley]

Excellent post .Glad to see you up and running. I'm a couple hours away and like you said getting logs shouldn't be much of a problem. I think WV is the second most forested state in the country.

[Magicman]

Most excellent.  There is a lot to be learned from your well thought out and organized reply.  

I went to Google Maps and typed in "portable sawmill" and I was on top.    I did not put me on Google Maps so I have no idea how I got there.  This tidbit will also help me locate a sawyer when I want to pass a job off that is too far from me.

[OlJarhead]

Nice work!  Great write up!

[scsmith42]

Very well written!  Thanks for sharing your journey and lessons.

[customsawyer]

Good post and good read.
In the picture of your edger it looks like the fence is on the right side. I ordered both of my Cooks edger that way because I run WM mills and most strait edges are on that side as it comes off the mill. I thought Cooks normally put the fence on the other side. Maybe I'm mistaken.

[NRFarms]

Good post and good read.
In the picture of your edger it looks like the fence is on the right side. I ordered both of my Cooks edger that way because I run WM mills and most strait edges are on that side as it comes off the mill. I thought Cooks normally put the fence on the other side. Maybe I'm mistaken.

It's the regular left hand fence model. My edger isn't set up to accept wood from the mill side. Since I can't run the edger and the mill simultaneously, I stack boards to be edged on a pallet and then edge them later. The edger is near the end of the shed; I set the pallet of flitches outside on a rack and feed them into the edger into the shed. This way, I can still use my roller tables and sorting tables that are set up for the mill. This method probably won't work as soon as I have enough help to run the edger at the same time as the mill. 

[NRFarms]

Thanks for all the positive feedback. It is really awesome to have this community as a resource. 

[Bert]

Great write up and beautiful area of the country you are from. Always enjoy travelling 19.

[thecfarm]

very nice post about making money with a sawmill!!!!!

[240b]

excellent post

[Magicman]

BUT.....remember that no matter how good your sawmill is, your product is, your plan is, your bookkeeping is; your marketing will determine whether you make it or not as a business.

[SawyerTed]

Great insights for a startup of almost any sort an especially great for new sawmill ventures. 

I wish some of the COVID entrepreneurs had that before they jumped into the sawmill business.