How Much to Charge for Thinning?

[OldYoungMan]

Howdy folks, 

I do a variety of small saw work for some older folks in my area but I'm considering doing timber stand improvement contracts for landowners who cost share with the NRCS. I charge 30 an hr for the saw work I do for the older folk (I know it's much lower than what others get, but I do it because they're my friends rather than clients), but I've been looking at my spreadsheets and I think I ought to be charging closer to 40 or 50 an hr when I start doing contract work. Do you usually mark up what the costs are for fuel, parts, mileage, etc. in your per-hour breakdown? How do y'all break down the costs and figure out what to charge so I don't end up screwing myself! Thanks and have a good one. 

[Otis1]

I would start at a minimum with whatever the NRCS is cost-sharing per acre, then add whatever you feel like you need to cover expenses and make a little $$. 

[OldYoungMan]

Thanks for the feedback. Yeah, I'll be talking to them later this week about it so that makes sense. I was told that they usually do an 80/20 split with the landowner which at 50$ per hour total wouldn't be unreasonable with the landowner paying only 10$ per hour of that but we'll see!

[Log-it-up]

$100 per hr is s what would shoot for but not a penny less than $85 
Construction company's weather it be dirt workers or plumber or electrician are charging any where between 85 and 125 per hour even mechanic shops are getting that why should a forestry worker get any less 

[Andries]

When you say timber stand improvement, are you talking about using a clearing saw only? Are you also elevating trees with a pole saw, as in knocking off branches in the first 15-20 feet? 
Even though you're doing this for friends and people you know, if you're getting paid to do the work, you can depreciate or write off 33% of the equipment cost per year. So, does your spreadsheet show that you can replace whatever equipment you use every three years? 
@SwampDonkey  does this type of work on regular basis, maybe he'll chime in.

[chep]

Log it up has it spot on. You are a skilled tradesman. Please charge as such. 
Good luck. 

[OldYoungMan]

I'm just gonna be using a chainsaw. No polesaw work. I'll just be going through a forested parcel that's already been marked by a forester and cutting down the trees around crop trees to release them. 80-100$ per hour sounds *DanG good I'll shoot higher quite a bit higher than 30$ per hour considering y'alls feedback and I'll see what I can negotiate with since landowners ain't too happy about paying for forest work (though the cost share with NRCS should help considerably). 

[Ianab]

Remember if you are an independent contractor, YOU are responsible for all the extra expenses. Insurance / equipment / transport to the work site etc. What you end up with in your pocket might be $30, but you may need to be charging $60 to cover the various expenses.

Now if you are working for wages, then $30 an hour might be good money. But in that case your employer is (hopefully) covering those overheads, and is probably charging your time out at ~$70 to make a profit. 

Also talk to a small business accountant about the tax implications / deductible expenses / depreciation etc. You don't want to be paying more tax than you have to when there are expenses that can legit be deducted from your tax bill. 

[SwampDonkey]

I don't do that kind of thinning except on my own ground taking wood for firewood and letting the junk lie on the ground. Years past there were cost share programs for such through woodlot owner associations and was funded by government silviculture money. Most of these treatments were non-commercial. No subsidy for treatments that produced commercial wood, except on small trials. All types of thinning in these parts is production pay per hectare or acre treated. And not much getting done. Usually under 10 acres on private land. Nobody pays wages by the hr for silviculture, except possibly based on production numbers. Those bosses would be experienced to understand the production numbers or will go broke. I thin young stuff with a clearing saw for a living. All production based on per hectare cut. I just happen to be the guy that does all the measuring and mapping to. ;D We get a rebate on income taxes for saws, gas, oil and upkeep. Boss man fills out a 2200 form to confirm expenses we have.

[Ianab]

Nobody pays wages by the hr for silviculture, except possibly based on production numbers. Those bosses would be experienced to understand the production numbers or will go broke

Yes, you need your accounting numbers in a row. 

Commercial thinning here is plantation pine. They are planted dense to create canopy closure and encourage upward growth early on. Then pruned and thinned (to waste) to the final crop spacing, Pay is usually based "per stem". Worker has a "clicker" and counts each stem. If the rate is $1 each, and you can do 30 an hour, then you do OK. If you hustle and do 40, good for you. Land owner gets charged $2 per stem either way. 

Many of the guys doing this are seasonal workers from the Islands. Come to NZ for 6 months, work their butts off and send most of the $$ back to their family in the Islands, then go home when the weather gets cold. Get another seasonal work permit for next year, and repeat. 

[SwampDonkey]

BC did some pruning in western hemlock in years past. More or less as trials. Mostly, pruning isn't recommended in many conifers since most have advantageous buds that sprout on pruned stems. It was done in some hemlock on the coast, but pruning interior hemlock seemed to speed up decay by Indian paint fungus. Pruning isn't encouraged here in the Maritimes. Fir and spruce are not high value trees, hardwoods usually get decay at the wound, don't heal quick enough. I've pruned some fir on the woodlot for my own benefit. It will not improve market prices. Mills here have set prices for studwood and logs, and except for pasture grown spruce (considered reject): length, presence of rot, top diameter is all that matters. Irving limits the size and number of knots per 4' section, but no premium for clear wood. Every way to reject wood, no bonus for the best wood they can buy. :D Markets encourage high grading with no rewards is what it comes down to.  There is no spruce veneer market here.

[g_man]

I'm just gonna be using a chainsaw. No polesaw work. I'll just be going through a forested parcel that's already been marked by a forester and cutting down the trees around crop trees to release them. 80-100$ per hour sounds *DanG good I'll shoot higher quite a bit higher than 30$ per hour considering y'alls feedback and I'll see what I can negotiate with since landowners ain't too happy about paying for forest work (though the cost share with NRCS should help considerably).

So .... Have they enrolled in Land Use to save a bundle on taxes over the years and now have a Forest Plan that calls for thinning but don't want to spend any money? Don't feel bad - you will need to make a living and earn enough to stay in business.
gg

[Old Greenhorn]

You haven't said, but we are assuming you have set yourself up as a business with the proper insurance (liability) as well as insurance for yourself, correct? If not, one mistake can cost you everything.
 That's where these high numbers are coming from, insurance and operating costs. As mentioned several times you have to do the math and list out your costs carefully and thoughtfully. 
 I do some small consulting work for small property owners and will cut a tree here and there, or advise them what they have for options with their property, but for full major TSI , thinning, or logging jobs I steer them toward a pro with the proper equipment. The first thing I tell them is to make sure whoever they hire has the proper insurance coverage. (The second thing I tell them is they can expect to wait: anybody worth hiring is already busy, and anybody that can start next week is probably not worth hiring. ;D)
 Best of luck to you!

[Ron Scott]

https://chilcoteforester.com/how-much-does-timber-stand-improvement-cost/#:~:text=TSI%20generally

You will need to determine how many acres/hour that you can do in your local type stands to determine a fair per hour cost. Talk with your local forestry consultants and conservation district forester for what the going rate is for such work in your area. If you exceed that by very much, private landowners just not contract to have the work done.

The local USFS and State Agencies are usually your best employers for such work.