Starting a new Sawmill Business

RaginCajun · July 25, 2009, 06:04:18 PM

Hello everyone,

I have spent many hours reading this forum over the past couple of weeks and feel like I know some of you personally. There are some very knowledgeable folks around here that I would like to get some advice from. Here's the story:

My uncle bought a new TimberKing B20 about 2 years ago to do a little custom sawing for friends and family. He also bought a new Kubota 50 hp tractor with fork attachments, a new Woodmaster Planner, and recently built a shed over all this to work in. Everything is paid for and he does not depend on the mill at all for his livelihood. The mill cuts beautiful lumber and my Uncle is a really good sawyer. My background is in Production Management mostly in Paper Mills although my last job was in a Sugar Mill.

Like many people, I got laid-off from my job and he asked if I would be interested in getting the mill going. I agreed and started making contacts. A guy at a pallet mill told me he would be interested in buying some cants so now we are trying to contact loggers and see what kind of hardwoods are available to buy around here in Southwest Louisiana. This is big time Pine tree country around here but there are still lots of hardwoods since the tie mill shut down over 25 years ago.

Right now we don't have any steady buyers and that's why I want to sell some commodity products just to keep the mill busy. Of course, we'll have to find out if it's economically feasible to do so. Any thoughts or advice in our endeavor will be much appreciated.

Bibbyman · July 25, 2009, 06:52:58 PM

Welcome to the Forum.

Business is pretty slow right now in most areas. A lot of big mills have went out of business and few are running anywhere near their capacities. But if you can hang in there a year or so maybe it'll work to your advantage to get your feet wet on the shallow end of the pool.

customsawyer · July 25, 2009, 07:19:47 PM

Best of luck. Welcome to the forum.

LeeB · July 25, 2009, 08:32:55 PM

Can't remember exactly where Elizabeth is. Isn't it just to the north east of Cameron? I don't recall there being too many doing cypress around there. You might check into that.

Puffergas · July 25, 2009, 09:23:29 PM

Quote from: RaginCajun on July 25, 2009, 06:04:18 PM
I want to sell some commodity products just to keep the mill busy.

Sawing just to break even is OK to get some experience but in time if there is no margin of profit your better to go fishing or work on improvement on the mill. In other words, after you have sawing experience, best not to start the mill up unless you are making a profit. Of course if you are sawing your own stuff your profiting.

I think this is a good time to start a micro business. Don't forget custom sawing. It seems like after you start sawing things happen. Well, slow at first.

If you have some low grade trees/logs (free junk) you might want to try sawing out some lumber and take it to an auction. Try sorted small bundles. Most of the time lumber goes kind of low at auctions so don't over do it. Maybe you don't have auctions in your area...

Balls to the wall ! ! !

farmboy1tn · July 25, 2009, 10:08:53 PM

it is always better to work for yourself best thing i ever done

Ron Wenrich · July 25, 2009, 11:21:09 PM

Sawing pallet logs is a mighty tough road to make a living on. Of all the guys that are still working, we have some sort of niche. I know of one guy who's cutting some really long timbers and another that has been sawing cedar for quite some time. Both are doing quite well during this recession.

You have one piece of the puzzle put together. You don't have a banker to pay each month. Of all the mills that are running, most have little to no debt.

Markets will be tough to crack, since you're just starting out. We haven't missed too much sawing since we have been in the same markets for over 20 years. We didn't jump in and out trying to chase dimes. Those things come back to you when times are lean.

I had 10 loads of pallet stock sitting in my yard. I make my pallet stock a little heavy and never scant. A pallet guy came in, measured the stock and took everything. That little bit of extra is my insurance plan. It insures he gets what he wants so I can move material. Prices aren't the best, but they aren't that good anywhere.

We have also started to export wood. With all those big boys shutting down or cutting back, there has been some markets that have opened up by just a crack. They pay really good, but are super picky. Have your absolute best wood man talk to anyone wanting export.

Log supply is going to be a big problem. Loggers have dropped out of the picture and moved on to other things. If you're the only mill buying hardwoods, you have a niche. If there's competition, then you'll have to pay more money for logs.

One equation I have always used is profit = lumber value - log costs - mfg costs. You being a hand at production should know how to keep the mfg costs down. Log costs you have little control over, since you have no logging crews. Lumber value is a function of marketing. Go get 'em.

fishpharmer · July 26, 2009, 01:52:41 AM

Welcome RaginCajun. You definitely have a huge advantage-a debt free mill. I notice some pipeline companies when travelling thru LA. Looks like they use big timbers for
mats and blocks (look like 6x6inches by 4') not sure what they are for. Could
that be a market?

bandmiller2 · July 26, 2009, 07:45:11 AM

Ragin,look into fence boards and posts,especially around horse farms and stables.Farmers always need lumber or custom cutting and their nice folks to work with.Build a small toolhouse put it out by the road with a price on it.Frank C.

LeeB · July 26, 2009, 01:55:51 PM

Disregard my last post. I just googled Elizabeth. I only missed the location by 100 miles or so. :

RaginCajun · July 26, 2009, 02:38:49 PM

Thanks to everyone for the comments and suggestions. We have just begun the process and it's very exciting with the usual up/downs and what-ifs. Next week I'll be focusing on finding some logs. So far they have been coming from homeowners and the yard is pretty bare at the moment. Got some nice cedar tucked away just in case a potential customer wants to see the mill run. It's not for sale, unless of course....

woodmills1 · July 26, 2009, 09:00:24 PM

Once you have learned to use it you need orders. As said pallet wood is a tough road to hoe. Contact farmers, horse people, dunnage users, and local high schools.
One or two connections keeps you going so word of mouth can kick in.

Meadows Miller · July 30, 2009, 04:26:25 AM

Gday

And Welcome to the forum rajincajun ;D ;D 8) 8)

Pallet is a hard road to go down unless you in high voulume work but your not the only one mate im doing finnished sizes 5x1" Atm mainly which is slow going on a lucas in smallsh logs :( :

but ill be going back onto Pine garden ties 8x2 8x3 and 8x4 in 8',9', and 10 lengths which will make things alittle better on the bottom line i also got given 55000 bft of Free treelength pine logs 2' to 3'-6"mid piont dia yesterday ;) ;D

a couple of things you have going for you is low/nill ecuipment capital imput costs for a start and that the costomer is taking cants which speeds up production ;) what sizes & lengths is he after and whats the price being offered also what sort of log costs are you looking at ??? the main problem you will face is handeling wing boards on the main mill which will slow you down abit ;)

You should be able to make a go of it you wont become rich doing it ;) :D but it will be bread&butter untill you become establised in local markes in whatever niche you find works for you wether that be doing fencing,Farm timber or a special market you find

If your willing to work and do the hard yards for a start you will find it a rewarding job erhmm i mean lifestyle Mate ;) ;D 8) 8)

Reguards Chris

jdtuttle · July 30, 2009, 06:40:31 AM

Write a business plan. When I did mine I realized other potential markets & products. It takes time and can be frustrating but when it's finished it will clearly identify where you want to go. The best thing about a business plan is you can always use it as a refrence & it's a livuing document that can be changed. It also helps keep me focused on my goals.
Best of luck. Jim

crtreedude · July 30, 2009, 09:09:40 AM

Our secret has been have a quality product for a good price and bypass all levels. We reach out to the end user and sell no wood except to them. We find we can sell really good cabinets for what you buy junk in the stores.

And if a customer is not happy, we will do all we can to make them happy.

In spite of a shutdown of a lot of construction here in Costa Rica, we have been growing in size.

Volume is a rough row to hoe - especially when you are just starting out. The profit margins are small, and the volumes are large. If you make a mistake, you can kill yourself off really quickly because you are pushing a lot of product, at a loss.

bandmiller2 · July 31, 2009, 07:42:20 AM

Ragin,look up some of the local tree service guys they have to get rid of alot of logs the smaller stuff they chip the big stuff they usally have to pay to get rid of it.Big mills don't like their backyard logs but a bandmiller with a metal detector can thrive on them.Don't imagin you have much demand for fire wood ,up here its big, and beats pallet sales by a mile.Could try cutting "landscape timbers" out of marginal logs put them out front with a for sale sign and let the people slap on preservitive.Frank C.

RaginCajun · July 31, 2009, 10:45:35 AM

You guys have got me thinking a little clearer now. Focusing on sawing pallet cants at this stage of the game would not be in our best interest. I like the suggestions that have been offered up and they mean a lot coming from experienced folks such as yourselves. Please keep them coming. Tomorrow we'll be traveling to East Texas for a sawmill equipment demonstration. Although our mill is fairly new it couldn't hurt to get out there and meet new people. I'm sure we'll learn a bunch too.

Sometimes opportunities are right at your feet and you don't see them until you stumble. My Uncle and I each have camps on a lake about 30 miles south of the mill. My neighbor is planning to completely remodel hers and will be interested in some of our lumber when she does. It's a start!!!

DanG · July 31, 2009, 04:05:31 PM

Quote from: RaginCajun on July 31, 2009, 10:45:35 AM
My neighbor is planning to completely remodel hers and will be interested in some of our lumber when she does. It's a start!!!

You're darn tootin' it's a start! A little job like that can give you some excellent contacts if you work it right. It would be good to find out what materials you could provide for the project so you can start getting them together. It takes time to get the logs, saw the lumber and get it dried. Most contractors are used to calling the lumber supplier the day before they're ready to nail the stuff up. You gotta have it ready for them or you might lose the job. On the other hand, if you do have it ready and it is nice stuff, you just might win a valuable customer in the contractor.

bandmiller2 · August 01, 2009, 07:15:25 AM

Ragin,build yourself a nice pier at the lake ,something impresive,put a sign on it custom pier lumber and your phone number.Frank C.

LeeB · August 01, 2009, 08:02:42 AM

You might still consider cypress. My dad used to get his from a mill just outside Broussard that I'm pretty sure went out of buisiness years ago.

fishpharmer · August 01, 2009, 10:38:12 AM

Those short blocks I was telling about earlier got my curiosity. I stopped and asked the pipeline outfit what the short blocks were for. Fella said it was just to set the pipe (think big) on while welding.

RaginCajun · August 02, 2009, 09:02:47 PM

I have seen a lot of those going down the highway too. Also see a lot of crane mats. They have two major pipelines being built in Louisiana right now. One is from the new LNG facility south of Lake Charles that's heading north and the other is from the Barnett shale fields in North Texas heading east. Sure wouldn't mind getting some of that block business.

We went to the sawmill demonstration in East Texas yesterday and left very impressed. Nice to meet up with people in the business and listen to their stories. The man who owned the sawmill had a nice setup. He had a "Control room" built that he operated his LT70 from. Very impressive!!!

Meadows Miller · August 02, 2009, 10:56:34 PM

Gday

Rajin its good your getting around and having a good look at how other people do things it makes it alittle easyer to make decisions on which way you want to go with your business mate ;) ;D 8)
Crane mats are a good market as you can get some good money for them if your in with the rite crowd same goes for dunnage ( it dosnt hurt to make phonecalls mate ;) ;D 8) and dont take their first price thats what they usually want to pay you ;) :D )we use to do afew crane/excavator mats when i was down melbourne ;) use to make them out of our low grade H/wood logs madeup out of anything from 6x6 to 12x12s 8' to 28' long and 18" to 4' wide we use to sell them from $660 for a small one to about $2800 for a biggun ;)

Reguards Chris

Magicman · August 05, 2009, 01:59:01 PM

RaginCajun, I watched your post a couple of weeks ago, but I was not a forum member then. :(

When I bought my mill in January, '02, I had ZERO experience with sawing. I had pine trees dying from beetles, so I moved it to my tree farm, set it up, and started "sawing". Sure, I messed up, hit side supports and the log clamp, didn't open the correct face on the log, etc. I gradually started "stacking lumber" and as folks saw it....I sold every board. I practiced and learned on my own logs.

My "Church Brotherhood" had visions of building a food mission in W. Virginia. I volunteered to cut the lumber if someone would donate the logs. End result, we loaded the lumber up, hauled it to War, WV, and built a 16X24 building in one week. With the publicity generated by this effort, I picked up a few jobs. Since then, I've donated the lumber for another 16X24 building, this one with an 8" porch and a 24' carport. The local newspaper carried the story, which generated more saw jobs. A storm downed a large cherry tree in town. I was contacted to saw it for a cancer patient. This generated a front page picture and newspapter article. Later the newspaper guy wanted to do an article on "retired folks". You guessed it.....Front page with pictures again.

I'm not trying to "butter my own bread" with the above paragraph. But I am pointing out that there are many ways to generate "free" publicity. It may cost you a little now, but it will pay off big time.

RaginCajun · August 05, 2009, 04:34:36 PM

I have been contacting crane companies Chris. That's good money!!!

It doesn't sound like you're "Tootin' your own horn" there Magicman. It sounds like you are a very good person trying to help others out and in the process you got a little publicity. One good deed leads to another and good food for thought. Thanks.

We sawed up a few cedar logs yesterday for my Uncle's deck. Hit three nails on the first log but the lumber looks beautiful. Sure wish there was a bunch of cedar around here because that stuff is nice to work with. We walked through his property and found several large pines that we'll saw next. Had a few problems with the mill - Up/down proximity switch and computer auto settings - but I think we got the bugs worked out. It gets better everyday.