Advise on Wood Mizer LT70 with full line for high production milling

longtime lurker · February 06, 2020, 04:30:48 PM

If it was me - now I've had time to think on it - yeah I'd be looking at it hard.

Look in my experience if you aren't prepared to stick your neck out occasionally you might as well get a job and cut a few sticks on weekends. Sawing as a business is not sawing as a hobby, and as with any business there's always an element of risk. The trick is to minimise that risk.

If you had a fair deal and a solid contract
and
If you can afford to carry the payments 6 months if it went sour
and
If you controlled the mill site, either by lease or ownership (they truck you logs, you saw, they pay, you load out lumber)
and
If you aren't afraid of 12 hour days for a couple years.

Yeah I'd look hard at it. If it stacks up economically it's an opportunity to saw volume and pay gear out and reposition within the industry, and one thing Ive found was every time I add capacity I promptly find work to fill it. The thing to remember is that if this goes sour a logger somewhere is still chasing a home for those logs.

But I've done it awful tough at times too, and it's cost me a marriage and a lot of 100 hour weeks.

Just don't get hung up on a LT70 as a saw... You might want an automatic circle, you might want a twin... when you get paid on output than fast beats kerf savings every time. And in any case I'll back an LT40 (or similar) and a multirip to run rings around an LT70 any day. Gangsaws are a winner in the game you're looking to play.

longtime lurker · February 06, 2020, 04:59:18 PM

Quote from: JamieK on February 06, 2020, 04:20:18 PM
I'm not a fan of borrowing money either, so I will be paying cash for everything. I understand what you guys are saying about working with the Amish. What do you think about putting the guy under contract stating that he could not hire another sawyer for an agreed upon period of time?

ahhh - wrong answer.
The right answer is you will talk to your accountant and bank manager and borrow a prudent amount.

You need to borrow, you risk the banks money not yours. That way you (a) get the tax deduction for the interest on the money
(b) hold yours in reserve to cover operating expenses and contingencies and (c) can walk out and buy logs if the original deal goes sour. You borrow for equipment and pay cash for logs - that like rule number 5 of commercial sawmilling.

Prudent debt is a powerful business tool and you need to learn how to use it. Mills don't fail when they have payments to make on gear.... they fail when theres no cash at bank to cover payments in a downturn, or wages, or buy logs... cash at bank is also a powerful tool and you have to hoard that because thats your flexibility and your buffer for hard times and your chance to take that load of veneer walnut logs that a guy cant find a buyer for in a hurry etc etc. If I owed another quarter million I'd be in a lot stronger position than I am now, because $250k buys a lot of capacity upgrade and the interest on the rest doesn't change.... the more output you can defray your fixed overheads against the cheaper your cost per unit of production.... and it's not expenses per se, its cost per unit of production that determines who lives and who dies in this business.

SawyerTed · February 06, 2020, 07:28:59 PM

You have cash to purchase $120,000+ in mill equipment and can'tbuild a building to put that equipment under roof and put that building on land you control (own or lease)?

The more I hear the worse this deal sounds. If you have that kind of reserves, put up the building and mill and work independently, if the guy wants to do business with you then fine. If he doesn't then fine. At least you control your destiny.

A contract only obligates you to enforce it ($$$$) when you get shafted. The need for a contract to "protect" yourself already indicates a business relationship that lacks mutual trust. Such a binding relationship lacking trust will only turn out badly.

I'm thinking you need to go back to zero and develop an independent business plan, study the market (including your Amish guy) And see if you can make it work. There's and old saying, "If you want to make a million dollars sawmilling, start with two million."

Southside · February 06, 2020, 10:09:37 PM

Even if you pay cash you need to re-pay your investment to yourself with interest or you are loosing money as your "profit" is actually real world depreciation - not just on paper, you are working really hard to loose money then. It's really easy to skip paying yourself thinking you will double up next month, you are already in trouble at that point. Something like a Hurdle would be a much better fit for what you are proposing, don't need an edger, but that puts you into at least $200K, likely more and that's without a building. A Select would also be better suited, but again - the saw alone is $120K. You gotta pay to play.

Completely agree with Longtime Lurker here, a Super 40 with a multi-head resaw or gang saw behind it would whoop a 70 in this scenario.

longtime lurker · February 06, 2020, 11:24:11 PM

Quote from: Southside on February 06, 2020, 10:09:37 PM
Even if you pay cash you need to re-pay your investment to yourself with interest or you are loosing money as your "profit" is actually real world depreciation - not just on paper, you are working really hard to loose money then. It's really easy to skip paying yourself thinking you will double up next month, you are already in trouble at that point.

Yes and no. :D
Yes I agree. But... I've basically worked for beer and tobacco money + household expenditure for the last 10 years. I'll probably do that for the next ten as well until I get all the saws upgraded. I turn over a lot of cash but the margin is slim which is mostly because of high fixed expenditure on the sawmill property mortgage (relative to my output, which is steadily increasing)
However, I am also well aware that no-one ever got rich sawing boards: The real money is always in the real estate... and I'm structured so I've got a nice tax deductible nest egg accruing. ( Not that it'll do me much good; I'll happily die cutting logs but my kids will do ok)
It's that whole of enterprise business plan stuff... logs and saws and lumber are just a part of the picture.
Just a different way to look at it. But I still agree with you.

JamieK · February 07, 2020, 07:39:13 AM

Ok guys, I will look harder at the lt40 super. Could you describe to me the work flow needed for an lt40 to keep up with the lt70. What would you guys suggest for a gang saw?
You got me to thinking about the money thing also. With the market soaring like it is even if I paid 10% interest on a loan I would be losing money by pulling it out and paying cash

WV Sawmiller · February 07, 2020, 10:52:24 AM

Probably the least qualified answer you will get but I'll chime in anyway. If you are considering the LT40 Super, why not the LT50? Is the super faster? The LT50 does have the chain turner which may be a factor if you are sawing this volume on a daily basis.

Also I would have questions about a written contract with the Amish. I have seen comments here that convince me others have a different opinion and experiences when dealing with the Amish than my limited experience. I just use an Amish farrier to trim my mules toenails. He has been salt of the earth IMHO. My friends have used them for various construction work and have positive comments about them.

If I were not comfortable with a handshake agreement with your Amish customer I would not make this kind of expenditure based solely on this customer/job paying for my expenses and equipment. If I had a back up plan I was comfortable with in case it fell through I might go through with it. Good luck.

moodnacreek · February 07, 2020, 12:50:48 PM

Quote from: WV Sawmiller on February 07, 2020, 10:52:24 AM
Probably the least qualified answer you will get but I'll chime in anyway. If you are considering the LT40 Super, why not the LT50? Is the super faster? The LT50 does have the chain turner which may be a factor if you are sawing this volume on a daily basis.

Also I would have questions about a written contract with the Amish. I have seen comments here that convince me others have a different opinion and experiences when dealing with the Amish than my limited experience. I just use an Amish farrier to trim my mules toenails. He has been salt of the earth IMHO. My friends have used them for various construction work and have positive comments about them.

If I were not comfortable with a handshake agreement with your Amish customer I would not make this kind of expenditure based solely on this customer/job paying for my expenses and equipment. If I had a back up plan I was comfortable with in case it fell through I might go through with it. Good luck.

moodnacreek · February 07, 2020, 12:54:52 PM

I to have seen good dealing with the Amish but every tribe has it's problems.

SawyerTed · February 07, 2020, 01:06:16 PM

You put it in much more subtle language than I was thinking. Maybe too much is being made of the guy bring Amish. Dishonest people hail from all sorts of places.

curved-wood · February 08, 2020, 02:46:25 AM

Years ago I change my mill. I've was hesitating between a 5'' band saw with teeth on both side and cutting back and forth, 70 to 100 HP, lots of production. The market was strong so it was not an issu for selling the wood. I went with an LT40. Why ? Because it was difficult to find good employees. In the 50+ employees that worked at the mill over the years I could say I had only one real good one. Actually I had more than one but as soon as they get enough experience they go in their own business so I had to start training again. I remember some days when the 2 employees didn't show up, I was sawing alone, doing long hours to fill in the promised orders. May be I was not lucky with employees ( I think a successfull business has always it parts of luck ), may be it was not my destiny. Anyway I am much more happy in life with my more simple setting of my LT40. And some others might be very successfull with the 5'' bandsaw but finally it was not for me.

stavebuyer · February 08, 2020, 06:57:08 AM

Quote from: JamieK on February 07, 2020, 07:39:13 AM
Ok guys, I will look harder at the lt40 super. Could you describe to me the work flow needed for an lt40 to keep up with the lt70. What would you guys suggest for a gang saw?
You got me to thinking about the money thing also. With the market soaring like it is even if I paid 10% interest on a loan I would be losing money by pulling it out and paying cash

Resaws are great, but all mills have a "bottleneck". Even an LT70 would starve any resaw worth running. I ran 2 resaws at different points. Running cull ties they worked well but you wouldn't cut enough logs with any bandmill to keep one fed. And unless your only product is pallet grade; multihead saws do not yield very good grade boards. LT70 vs LT40. The 40 Super is no match to the LT70 for production sawing. The chain turner, vertical backstops, and DCS remote joysticks on the LT70 allows you to be in a cab and saw towards you. The chain turner and joystick controls allow for much faster log handling even if the sawing speed is identical(and I don't think the 55HP Yanmar was ever available on any mill except the 70?) When you are loading and turning logs you ain't sawing and all those seconds here and there really add up. If you are going to saw 5000' the sawyer needs to be sawing. I can tell you that being stationary and holding onto the joysticks you are positively not going to do it without a cab no matter what mill you plan to run.
Back to general business. 90% of all new businesses fail. Some were just plain bad ideas. Many that could have worked failed from lack of cash. The sawmill payment would be the smallest expense of your daily outflow. Labor is going to cost $150-$200 per day per man by the time you add in work comp/ssi/ui you can figure 1.5 times base salary. 4-6 bands per day. 12 gals diesel for the LT70. Chainsaw in an employees hands will be way more than you think. Banding? Supplies and tools that are used/lost/stolen. Place to lock small things up. Time for cleaning and maint.
A split blade edger is an essential. Fuel and spare blades for it. Log decks and lumber chains all need to be powered. Electric is cheapest but a three phase entrance might cost a grand a month minimum just for the drop. Diesel generator or hydro power pack will use that or more in fuel. Insurance in the commercial world isn't cheap and they want the premium up front for the year.
Down time. You will have it even on new equipment. WoodMizer is great for product support and warranty but you loose the rest of today and most of tomorrow every time a OEM only part breaks even with next day delivery. In addition to spare wear items I ordered an extra of whatever shut me down and generally ended up needing them. It pays to stock some parts. Run hard every day you will need all the bearings, belts, drive motors, solenoids, brushes etc. attached to your machine. Its not a matter of "if" its a matter of when.

Your plan needs to account for those expenses. I would want some kind of "cash or credit reserve" to able be to survive my annual living expenses for a year and operating expenses for 30-60 days. The 90% that went under probably either didn't think they needed that much cash or just hoped if they worked hard enough they would be in the 10%. I tend to think the ones who had the means to survive the inevitable misfortune are the 10%. That misfortune can come from any direction. Wars/weather/markets/bankruptcy/accidents/law changes the list is endless of things that can and do come out of left field.

I was operating with 4 men and as a rough number when dawn broke I figured it was going to cost $1000 a day to cover the overhead. When things break and people don't show up you have to have some margins and cushions to cover it.

Logs aren't usually cheap and you pretty much have to buy when they are available or you wont be sawing many. That is the one plus I can see to sawing for someone else. Log inventory and waiting for lumber checks could easily multiple your cash and credit needs by 2 or 3 times the initial equipment cost and banks aren't very friendly toward logs as collateral.

The part I have trouble with is margins in the commodity world are thin. Its possible to get per unit sawing cost on a band mill to $.20/ft or less but you won't do it coming out of the gate and most times $.20/ft seems to be the magic number the big mills keep the log vs wholesale lumber average at over time. The Amish can pay $.30 now because he has relatively cheap logs and some lumber market that was priced to a higher flooring market. Supply and demand will enter in and someone will eventually undercut his $.30 margin. He may sell lumber to his cousin who builds pallets but the cousin will eventually loose the order to someone buying boards at the $.20 margin.

YellowHammer · February 08, 2020, 08:18:33 AM

I visited Baker a couple years or so ago at their Missouri headquarters, and they gave us a full tour of their facilities, including, which is unique to them, I think, their several production sawmill operations where they use their equipment to mill lumber, crossties and pallet wood. They weren't playing, they had one operation with a scragg (they build circle mills as wells bandmills) and a line of 7 parallel multihead resews, 5 of which were running when we visited. Very big operation, full time production, lots of employees, with one guy whose only job was to go around sweeping up random sawdust and keep things tidy. There were other operations as well, and the other one that sticks out in my mind was this one the Baker made a video of, with two guys when we were watching, although looks like there are more in the video. The two guys went from logs to crosstie to pallet slats and they were humping it. Moving with a purpose, is the best way to describe it. One guy sawing, the other working the edger, forklift, moving pallets of processed lumber, etc. It was obvious they weren't just putting on a show for us, and the manager told us that they get paid for the bdft, this was their full time job. If the equipment broke down, they lost money, and if they slacked off, they lost money.

So what makes Baker unique is that they use their equipment for real sawmill operations, as part of their company income and they had two full production facilities when we visited, and I was very impressed about how they have optimized different pieces of their equipment to run their operations.

My point is that their stuff is built like a tank, and built to fit within their production lines to make themselves money, and then they also sell it.

Another thing that impressed me was that they have a full time service crew, whose job it is to drive and repair stuff, on site. When I had trouble with my first edger, they had a guy drive from Missouri to Alabama the next day to work on it. So I was and still am very impressed with Baker.

I own an LT-70 Super and am very happy with it. It fits my needs for what I do. I also love may Baker edger, it is a crucial piece of our operation, so I'm not brand specific.

If I had no other suggestion to add to these guys who have given such good input, and who saw production everyday, I would suggest to go visit Baker and walk around and see whats possible, and what they come up with to meet your goals. When you look around on the video, you'll see mountains of logs, that isn't just for show, thats for real and they chew through it.

Anyway, my input. Well, I would add, one of the keys to our success is to be in control of your own operation. I would consider the offer, but I would also be looking at second sources and avenues so I was not locked in with them, or anyone else, when they decided to yank my chain or play hardball. Its a business thing, if you don't have leverage, you will get the sharp end of the crowbar.

Two Man Dominator Sawmill System in Action!!! FULL VIDEO - YouTube

RichTired · February 08, 2020, 05:19:56 PM

That's a good video and a pretty good "2-man" operation.

I just wonder how many support helpers those 2 men have?

YellowHammer · February 08, 2020, 06:12:35 PM

When I was there, two were it. It wasn't these guys specially, but there were only two. The edger guy even hopped on the forklift to move the pallets of lumber out of the way and got an empty pallet. The only extra hand was a guy on a fork loader who would drive by periodically and pick up the stack of cross ties and haul them off.

I watched for about an hour and was struck by how they weren't babying the equipment at all, they were using it. That's one reason I got the Baker edger, I asked him how often they had to retrack and realign the belts and he said about every half million boardfeet.

moodnacreek · February 08, 2020, 08:08:28 PM

Always enjoy stave buyer's posts. Opinions from actual experience don't make popular posts but they are valuable. Most posts here, mine included should discourage the person who wants to go in business. I would like to say that to invest in sawmill machinery for profit requires an existing income. This boils down to working 7 days a week, sometimes 16 hours a day. Did I here old double L say it cost him a marriage?

Peter Drouin · February 08, 2020, 08:09:56 PM

I have a supper40 with a 51 horse cat ok for what I do here. [retale ] If I wanted to do wholesale get a circle mill. A ban mill is a joke for wholesale work. [ To slow.] unless it has a 8" wide ban then maybe. :D
And buy your own logs.
Good luck.

JamieK · February 08, 2020, 08:18:25 PM

The advice and stories from you guys is priceless. I sure do appreciate the time you guys spent sharing your experiences and expertise.

curved-wood · February 09, 2020, 03:41:05 AM

One of the best high production mill and few employees I've seen is a 10''band mill, double cut. The band is fixed and vertical, the log is moving on the carriage. The owner, a third generation sawyer, is a genius and a machinist. He had install 2 direct drive sawblades horizontally ( I guess around 12'' diam) so he was edging at the same time is was making is cut. Here is the cutting order all from inside is booth: 1) debark the log. 2) roll the log on the carriage and make the first cut. The slab falls falls on a conveyor. 3) has the log is coming back he set the height of the 2 circular blades but not the depth 4) swing the 2 blades at the fix depth at the meeting point of the band cut and make the second cut. That gives an edge board. And repeat for all the faces. So his system has no separate edger. It was a truly a 3 man operation. Himself the sawyer, a tail-gunner and the loader driver. The slab was chip, blown in a 45' trailer and sold to the paper mill. He was saying that the chips pays the employees and that he was sawing around 8,000 boardfoot /day that is grade sawing

Lawg Dawg · February 09, 2020, 04:35:47 AM

My advice...just go with your gut.

longtime lurker · February 09, 2020, 06:21:49 AM

Quote from: moodnacreek on February 08, 2020, 08:08:28 PM
Always enjoy stave buyer's posts. Opinions from actual experience don't make popular posts but they are valuable. Most posts here, mine included should discourage the person who wants to go in business. I would like to say that to invest in sawmill machinery for profit requires an existing income. This boils down to working 7 days a week, sometimes 16 hours a day. Did I here old double L say it cost him a marriage?

Yeah, you heard right. It wasn't that simple - she missed her kids and grandkids and once she lost her gig e-commuting to work in the states and a couple trips a year to see clients/family there wasn't a whole lot of opportunities for a U.S. 401k/ERISA/securities expert in rural Australia... but at the end of the day it boiled down to I'm going home (Dallas) and you can follow or not, it's me or the sawmill..... and I had a log supply contract with a penalty clause and a whopping great mortgage in falling property prices and it would have bankrupted me to go. I told her I needed 2 years and almost 2 years to the day later I could have left at break even or slightly in front... but by then I'd had the divorce papers in hand for 12 months.
Rock and a hard place, and what I had to do wasn't what I wanted to do. But... I miss her, every danG day I miss her.

Roxie · February 09, 2020, 06:52:37 AM

That is a very sad story. :'(

ellmoe · February 09, 2020, 07:30:52 AM

Many great stories and very good perspectives. I , for one , have a hard and fast rule , no more than 20% of sales go to a single customer. Too much risk and lost control. If a customer wants more than that , they can buy me out.

moodnacreek · February 09, 2020, 09:03:16 AM

Maybe I should not have brought that up about L.L. But the fact is, over the years, I have seen some very honest and ambitious men lose their wives trying to keep their business.

curved-wood · February 09, 2020, 10:05:02 AM

To share those personal experiences is something very particular about this forum. Guys are able to talk about nut and bolts but also about very personal fact. To have a success business boils down to have a ''success'' in life which does not always go together. Thanks for sharing those very helpfull personal experiences.
Kind of coincidence that the top gun sawyer I was describing few lines below, had added a crate manufacture line, a huge commercial kiln, a flooring planing shop, etc., more than 25 employees. Got divorced and finally bankruptcy !!!
I guess we always have to adapt the business to our personality and our conditions of life. There is no universal answers