Raise prices or add blade fee?

[NewYankeeSawmill]

I think is comes down to two questions, at least in my situation it did:
1.  What net profit does it take for you to make enough money to stay in business PLUS stay motivated to keep doing it, PLUS upgrade your equipment?  Or for that matter, not doing it, and going fishing? As I've said before, sawing is fun for the first few thousand logs, then it's work.  That's what we did, I started with an LT15 manual, then made enough money for a LT40, then moved up to a 70. 
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Also, if customers are tipping you, it's their way of saying you are not charging enough for the service you are providing.  Listen to them!     

Thanks for the advice! My plan for things roughly parallels your experience! You are correct, coming up on a year, it's time to start looking at what changes to make, hence this whole thread!
I'm still happy sawing logs, meeting new friends for a day or three, and everything else is moving in the right direction. I identified my blade-usage as a metric that was out of whack w/ my original plans.
I knew my rates were low, that was intentional to attract customers and get the name circulating, figured I'd have to do it for a year. I took the (large) tips as a sign I was under-charging, and that customer's saw good value in the service I am providing. Another indicator it's time to increase my rates (and I like round numbers like Jan 1st).

RE: #2, I believe like you Customer Service is key. Most of my customers are extremely ignorant (mind you, that's ME: the rookie, saying that!), and require a lot of hand-holding. I've also landed several jobs b/c "the LT40 guy said 6 months". I've tried talking to the customers w/ nice logs about quarter-sawing, etc., and none are interested. I talk to them about quality of wood that comes off the end, drying, cupping, warping... not interested. Make a cant, whack it into boards. OK, Mr. Customer, Sir. Not my wood, so I do what they ask of me.
I've even pointed out when a board separates and one end warps upwards: Hey, this is what I'm talking about, that movement indicates it's going to dry like that. Still not interested. Shrug, ran into the same attitude in the print biz when customers wanted digital vs. offset. Ink is way better than toner, buuuuut.... $$$ won the day, they all bought digital. If you didn't listen (e.g. bought a digital press and transitioned your business model), you were out of business in 5 years. That being said, there are ink-on-paper printers still around, but the business models have completely changed, and most of them have had to specialize or become niche printers (e.g. High Quality Hardwoods have a finite market potential - Barn builders aren't buying your wood) You've found how to meet your customers and grow your business in the direction you want it to go. I'm just a decade or so behind you !

This is one reason I'm a stubborn SOB about it. Been there, done that. Got a worthless B. of A. and 25 year career, but no T-shirt. Now if I had customers like yours, I'd be sawing differently, but that's not who pings my FB ad's. I HOPE to one day have higher quality customers, but for now this is what it is. Can't wish it into existence. I expected 1 year of hard-row, hoping year 3 or 4 I can be selective and actually turn customers down. Year 2 is the year to experiment, 3 to refine. Time will tell.

Have to L O L @TroyC , yep, it's work allright! Fortunately I have another income stream. The sawmill is supposed to be secondary income stream to my trading. I can make a months worth of sawing income in a few hours in the QQQ's if I catch the right options contracts, but that doesn't happen every day. Won't even talk about Crypto, it's still the wild-wild west, but it brought in a nice chunk last month, so I keep plugging away at it...

Thanks for the comments @Jim_Rogers and @doc henderson ! It's still a for-profit enterprise, but I'm finding resistance from customers when I try to push quality. I think largely because they're not often wood-workers. They're home-owners looking to extract some value from some logs they'd otherwise have to pay someone to chop or grind up. They figure if they pay me to saw them, they get a pile of lumber, vs. a pile a woodchips. Most of the time they don't even have a project or cut-list in mind for the wood! They just want to see the logs --> lumber. That's tough on me! OK, I made you a cant, what do you want me to do with it? "I dunno, you're the sawyer..."       

[YellowHammer]

When I first started, I sawed all boards as fast and best as I could, whether the customer knew what I was doing or not, if nothing else, for practice.  Trust me, customers, especially ones who have used other hacks before, will remember when they compare straight wood vs garbage wood, and that will make your reputation.
 
I still get thos calls all the time, people asking me to saw their logs because the last time they had so and so do it, and they got garbage back.  So your customers may not pay extra for quality, but many will return because of it.

I'd didn't start by only sawing high grade furniture wood, I sawed every log a customer brought.  I especially loved the customer who would bring enough logs for their "barn package" because that meant, since I charged by the bdft, I was going to be burning through them and my paycheck was going up.  That's the reason I charged by the board foot, the faster I got, the more money I made, then I could upgrade my equipment.  You will notice that the vast majority of production time of a sawmill is not because of the speed of the sawmill, it's the efficiency of the operation.  So as I increased my efficiency, I increased my bdft yield, my profits went up, and most times, things actually got easier.  Take steps to save steps and "make mo money."  If you charge by the hour, then the motivaiopotn to get more efficient decreases.... 

If you do not have an active webpage then you need to get one.  CL and FB are ok, at best, but, where do you, and 99% of the people who do their first, initial search for any product?  Google or a conventional web search.  Then they go to secondary searches.  So if you have a good webpage, you will get the "first search" people before they ever have a chance to go to FB or CL.  And I will say this, I don't even do FB or CL anymore, simply because the vast majority of searchers on them are of the "picker" mentality, and our business and clientele picked up considerably as we moved to more conventional search engines.  So as a new business, you should have a presence on both. 

[NewYankeeSawmill]

Great advice, thanks @YellowHammer !

[fluidpowerpro]

I've tried talking to the customers w/ nice logs about quarter-sawing, etc., and none are interested. I talk to them about quality of wood that comes off the end, drying, cupping, warping... not interested. Make a cant, whack it into boards. OK, Mr. Customer, Sir. Not my wood, so I do what they ask of me.
I've even pointed out when a board separates and one end warps upwards: Hey, this is what I'm talking about, that movement indicates it's going to dry like that. 

Thats the same thing I experience. 
At the end of the day it seems all they care about is how big their stack of boards is. Especially if I'm sawing dimensional construction lumber.

[Jim_Rogers]

"I dunno, you're the sawyer..."

When they ever said that to me, I'd say ok it's done and it's time for you to carry it off the sawmill table.
And I'd get: "oh no, I want boards."

Then it would start, ok, what thickness? What width?

It got to the point where I had a sheet with all my questions written down that I would give or email to them up front so that I'd know what they wanted. So, I didn't have to stop and ask at each log.

I wouldn't take " "I dunno, you're the sawyer..."  for an answer. That's no way to satisfy a customer.

Jim Rogers

[WV Sawmiller]

   I guess we all get that question or a variation of it. When the customer asks me what I'd make out of a log/cant, I tell them I would make whatever I needed as long as the log was big enough and an appropriate species.

   I sort of which they'd tell me to cut what I want. I hope they are good at stacking 2X10s all day long.

[Magicman]

I really do not recall being asked by a customer what he should saw from a particular log.
I always get a cut list then I decide what will come from his logs based on that cut list.  

I may make a suggestion if he has a maverick log that really will not saw anything that he is particularly wanting.  I may also very well not scale nor charge for sawing it.  I may tell him that it is a surprise for his wife. 

[SawyerTed]

When I ask what do you need cut from your logs?  I get everything from "just boards" to a specific cut list pulled from a bill of materials. 

"Just boards" requires considerably more conversation.   The definition of "a board" requires some clarification!    And what's the difference between a board and a plank, because I get "I need planks to..." every once in a while.

A cut list is great but for some customers it's a stretch to get what they want from their logs!  

Seems like I'm always "educating" customers.  

Often a customer has a project in mind but just needs some prompting to articulate what they need. 

[YellowHammer]

I agree, I got a lot of that request!  Most of my customers would supply a general cut list, "I need a bunch of 2x4's and some flat wood" but some would bring a trailer load of logs, and just say "Cut it, I don't care what thickness" and I would always default to 4/4 flat sawn, because that's what I could sell easiest.   Quite often, when the customer would come pick up the lumber pile, it would be much larger than they expected, or more expensive, because I could about beat Doyle every time, and then they would start the "negotiation" or whining.  As in, "Can we just split it, and so that would pay for my part?"  Nope, never, because there is no money in "splitting it."  So the answer was, "Pay me for what I've sawn and whatyoj want, and if you can only pay up to a ceiling then you can take what you pay for, and I get the remainder of your wood for free."  Then they would say "But your're gonna sell it" and I would say of course, I need to make up my sawing fee somehow.  Most would agree, they get the lumber they want, they don't exceed their budget, I get paid, and I keep their excess and "dispose" of it at a profit.  Everybody is happy, especially since I could take the lumber I sawed at 50 cents per bdft, using their free logs, and whatever they didn't want, I could easily flip for twice the sawing price, at $1 per bdft, even green.  So it wouldn't bother me at all if they left half the pile with me, because I would double my profit.  After all, I am in the lumber selling business.

[WV Sawmiller]

MM,

  I get 2 basic kinds of customers.

  One has a detailed cut list and I like that. Even then they will usually say cut this much into specific framing and make the rest into 4/4 boards or tell me to make the rest into 2X4s or such.

  The other has some logs from salvage or clearing or such that they don't want to see go to waste but have no specific plan for the lumber and they are the ones who ask me what to make from them. I may tell them it would make certain kinds of good boards but the decision is always theirs. I may even have to cut a couple of samples to show them the differences between one inch, 3/4", 1-1/8", 5/4, 6/4, 8/4, etc.

  Sometimes I will make a cut into a log and the customer will see some figure he likes and have me change from our previous discussions and saw it into 1/2" paneling or a 3" mantel or 2" bench, etc. Depending on how far along I am with sawing the cant it may mess up my plan for that log an I'll have to make a trim cut or two

[Magicman]

Maybe I was being too specific or not specific enough when I said "cut list". 

There is very seldom a number of the various dimensions.  He may say; 2X4's from the 8's and 2X6's from the 12's and 16's.  Then I may remind him that he needs some 2X4 top plates, etc. and will need a few 2X8's for his ridges.  He may also say; "OK, I have enough of these, so saw the rest in those".  We work together so the cut list is generally "in progress" as I saw.   It would be a very rare occasion when the customer is not there when I am sawing.

I have not shown the pictures yet but I have a very nice framing lumber job coming up in January, all from fresh felled trees.  I also have another total framing lumber job scheduled for March, again fresh felled logs.  These will be a welcome change from the beetle/drought killed trees that I sawed this year.

[Ianab]

Where the small and easily portable mills come in is for the small jobs. 1/2 day sawing a couple of logs. Sure a full size hydraulic mill might knock the job out in an hour, but they aren't interested in one log in a back yard, and might charge ~$400 minimum or setup charge. Now if you can roll in, and charge ~$60 on hour, and it takes 4 hours, then you are the better option. Because $240 is less than $400. 

And yes the "what to cut" is a genuine question in that scenario too. I ask, "What do you want the wood for? It might be build a shed, in which case they need 2x4s and "x by 1s". Or some live edge slabs for a table, or for wood working projects (may q-sawed?) Some folks may never use the wood, but they didn't want it to go to waste.  

[Old Greenhorn]

........

If you do not have an active webpage then you need to get one.  CL and FB are ok, at best, but, where do you, and 99% of the people who do their first, initial search for any product?  Google or a conventional web search.  Then they go to secondary searches.  So if you have a good webpage, you will get the "first search" people before they ever have a chance to go to FB or CL.  And I will say this, I don't even do FB or CL anymore, simply because the vast majority of searchers on them are of the "picker" mentality, and our business and clientele picked up considerably as we moved to more conventional search engines.  So as a new business, you should have a presence on both. 

I didn't see where you answered this question but I would like to add a Plus One on this comment, since the discussion deals almost as much with educating and grooming clients as it does with how you charge them. As has been said, nobody likes paying charges they don't understand.

 So having a good website serves a lot of purposes besides what Robert pointed out, letting the clients find you. It is a great place to deposit that educational and preparatory information for your clients as well. I quickly tired of getting the same (very reasonable ) questions all the time and spending a lot of time repeating myself, so I put it on my website and could then hand people my card and refer them to the site for the detailed info, complete with other references they could look up to confirm some things or get alternative views. That proved helpful and so much so, that I put a bunch of effort into the mushroom log side of the website with lots of references for other supplies and resources.  That, in itself turned out to be the one thing that 'sold' a lot of first time clients just by itself. I got a lot of phone calls from new clients and the first thig they would say it "I found your website and thank you so much for putting all that out there, it cleared up SO many questions for me. I'd like to order some logs....". The way it worked out (as far as I can figure) is that folks knew, or now know, that they are not just doing a one time exchange with me for logs. They are getting me as a free resource for ongoing information and growth.. In other words, it builds that relationship you are looking for.

 When I would do shows and other things, the single most common question people asked was "What the heck is a mushroom log?!" I mean it was nearly constantly asked. So I made a static page in the mushroom section on my website with that exact title. Then I had a couple of t-shirts printed up with my logo on the front and on the back was that question with a QR code thing that brought them exactly on that page. A gimmick? Yeah, for sure, but it got a lot of laughs and a lot of traffic on my site, and I even had a few folks that wanted to buy my shirts.
 As most members here know, knowledge is power and knowledge has value. Sharing that knowledge can improve other's lot in life. I freely offer that to my clients and many times they reciprocate with their business.

 Since I don't do much sawing for private clients, I have less sawing stuff on my site, most of what I saw these days is B2B and they know what they want. I don't have to explain what a BF is.

 These days doing a website is cheap if you do it yourself, although it is a time suck to get it started. Winter time is a great time to go down that rabbit hoe and get it up and running. You can put all your terms and explain the expectations you hold as well as leave explanations there for why you do things the way you do. Keep in mind your readers are looking at it form a 'what's in it for me?' point of view, so tell them the benefits of doing business with you the way your are suggesting. For instance: "Having your logs neatly prepped in one location will make the sawing easier and faster when I arrive and this will save you money and wasted time on that hourly rate."
 When you meet somebody, hand them your card, point out your web address, and tell them they can find a lot of detailed information there to help them get started. YMMV but I can tell you it has gleaned me a bunch of new clients and saved me a lot of talk time.

[NewYankeeSawmill]

I didn't see where you answered this question but I would like to add a Plus One on this comment, since the discussion deals almost as much with educating and grooming clients as it does with how you charge them. As has been said, nobody likes paying charges they don't understand.

Thanks OG, yes, I do have a site, put together by me... not fond of it, but it's a start.

www.newyankeesawmill.com

Every time one of the plug-ins updates, something moves... Grrrr.

I need to get an SEO campaign going, but last I looked into it was above my pay-grade. I priced some things out, and I would really like to just hire someone to re-design the whole thing and do the SEO for me (not happy w/ design either). Just don't have the cake right now (common thread...) Had to drive an hour yesterday to p/u a check so I can get my truck back from the service shop ($1300 for head gaskets). A good designer can do the site for about the same amount, its just not in the budget right now, I don't want to have to subsidize the business any more than I already am.
I realize it's another one of those chicken-egg things. Right now I've got Year-end Taxes and paperwork filling my plate, but I'm hoping to pass that off to my accountant. Thanks for the second and reminder however! Hopefully January will see work explode and money won't be a concern!