Just curious

[Ianab]

But 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

[Peter Drouin]

But 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 

[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

[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]

but 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.

[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

[lyle niemi]

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.

[Peter Drouin]

but 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

[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.