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Author Topic: Need help generating a business plan 18 yr old  (Read 3674 times)

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Offline brmoore134

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Need help generating a business plan 18 yr old
« on: October 09, 2012, 10:25:19 PM »
Hello, I am from Ohio I want to log full time when I am older. I am currently working a full time job and saving every penny I can get my hands on and its turning into "what money?" ;). My business plan is to save up enough to buy a minimum of 30 acres and a maximum of 50 acres to begin with and attending any state logging events. Hopefully in 3-4 years I can research enough and save enough to find the right property along with help from state foresters. I want to log the larger older trees suitable enough to go to a mill to send there. And the dead wood or woods that need thinning to sell as firewood. My plans for equipment is a skidder or tractor along with a four wheeler with a log arch for smaller dead trees along with the chainsaws and chains or cables I would need. MY question is do you think with only a small house and full time weekly logging I would be able to make a profit enough to live off of by harvesting 40 acres solo( I am not a high maintenance person). At first I would contract trucks assuming the right price to haul out my lumber to the mill then maybe with enough profit I would buy equipment to haul myself.

I have yet to figure out costs to make a rough estimate but for machinery what do you guys expect me to spend on equipment(working on it at this time)?

Will I be able to support myself and make enough money to save up again for another piece of land?

How long can I expect to sololy log out a acre of land?

Do you guys have any idea's to help me achieve my goal or experiences you could share with me to help me achieve this.

Offline 1270d

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Re: Need help generating a business plan 18 yr old
« Reply #1 on: October 09, 2012, 10:34:10 PM »
Hello and welcome

You sound very ambitious and this is a good thing.  Im pretty inexperienced in the land buying aspect.  if you figure out a way to buy land, log it in a responsible/sustainable way and make a living on top of the land payments,  you will do well in life im sure.

  I think this is like the pot of gold that many search for but few have found.

Looking forward to seeing some of the other's ideas

Offline brmoore134

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Re: Need help generating a business plan 18 yr old
« Reply #2 on: October 09, 2012, 10:38:19 PM »
My plan of saving all my money is to flat out buy the lot so I won't have to make payments to pay it off so even if I do hit hard times I don't have to worry about a large land bill every month or machinery bills. Hopefully I will have minimal bills and just running costs.

Offline redprospector

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Re: Need help generating a business plan 18 yr old
« Reply #3 on: October 09, 2012, 11:59:32 PM »
There are a lot of variables to consider here. I don't know what land cost in Ohio, or what the timber market is like. I have been looking at land here in the South central mountains of New Mexico, 50 acres of land with decent timber will cost close to half a million. I was looking at 10 acres that was $125K. Needless to say, I'm still looking.
We don't really have a timber market anymore, but when we did the best we got was $200 a thousand board feet. It's hard to pay for land at that rate. I'm sure your market is much stronger.
A decent skidder will probably cost $20 to $25K, don't know about a 4 wheeler and arch.
I'm sure it's different logging high value hardwoods, but I'd think you would have 40 to 50 acres done pretty quick(if you're making a living at it).

Andy
1996 Timber King B-20 with 14' extension, Morgan Mini Scragg Mill, Fastline Band Scragg Mill (project), 1973 JD 440-b skidder, 2008 Bobcat T-320 with buckets, grapple, auger, Tushogg mulching head, etc., 2006 Fecon FTX-90L with Bull Hog 74SS head, 1994 Vermeer 1250 BC Chipper. A bunch of chainsaws.

Offline stavebuyer

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Re: Need help generating a business plan 18 yr old
« Reply #4 on: October 10, 2012, 04:57:12 AM »
You have great goals for someone so young. You will come closer to making your plan work with a small sawmill. It doesn't take long to go through 30 acres logging it; even working by yourself on a small scale if your at it full time. I have been at this a long time and can tell you the vast majority of sawmills that made real money did so by buying land with standing timber. The easy credit of the last decade or so inflated land prices. The new reality of lower home prices and tighter credit has taken many of the recreational buyers out of the picture so I think we may see a time where timber to land values may get a little closer in some spots. I'd say keep saving and buy your land but don't quit your "day job" until your logging/sawing venture is profitable. The reality is the first 30 acres of trees will probably go towards paying off(even if you buy it with savings) your equipment. The best "land deals" generally aren't listed in the classified ads. Research at the courthouse and contact absentee owners who have moved or inherited tracts off the beaten path. More to be made on making a good deal on the initial purchase than the work itself. Best of luck!

Offline Kansas

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Re: Need help generating a business plan 18 yr old
« Reply #5 on: October 10, 2012, 06:36:09 AM »
Nothing wrong with buying land, but looking at your post, I am unsure of your experience level. If you are not highly experienced in logging, I would suggest you start helping an older logger. The reason is this. How to sell logs and the correct way to cut them down are the starting point of what you want to do. How to do it safely. How to correctly cut down a veneer walnut or oak log. You can also get started by getting trees that are getting dozed out, or a small timber harvest that the big boys don't want to mess with. But you really need to get some experience under a good logger. Find one with a good reputation. Even if you work for little of nothing, consider it education. Lot cheaper than going to college.  If you can get to the point where you have an idea what you are doing, then you can start to log other people's timber and build up an inventory of equipment. Then you can use that as a launch off point for what you want to do by buying land. But its going to take more than what you want to have a decent lifestyle. You might be low maintainence. A wife and kids, maybe not so much. Learn the business first.

In regards to stavebuyers comment about getting a mill, I can't say its wrong, but remember this; you can't saw a log into lumber and log at the same time, unless you choose to have employees. If not, you will have equipment sitting. If you are the type that would not have a problem with dealing with employees, and would enjoy selling lumber, working with the customers, then that could well work. And I suppose it would work as a one man operation. I just hate to see equipment sitting. Equipment sitting is an asset not taken advantage of. Sometimes its a necessary evil. One of the biggest mistakes I have seen in the industry is a logger who sees what he gets for low grade logs, and decides if he bought a mill, he could turn that into a lot more money. He can't. I guess if it keeps him busy during a rainy season, that helps, but when the weather is good, he can make more being in the timber, at least under normal markets.

Offline brmoore134

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Re: Need help generating a business plan 18 yr old
« Reply #6 on: October 10, 2012, 06:58:23 AM »
I am aware that the land price is expensive but I am willing to move to where I can get a better price on the land in buying. And if you dont believe 40 acres is enough to last what do you guys believe will be enough to make money off of? And for as learning goes this next year I am going to any logging events the state forestry offers and I will be looking for people close by to start working with for minimal pay or just experience.

Offline WDH

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Re: Need help generating a business plan 18 yr old
« Reply #7 on: October 10, 2012, 07:28:32 AM »
The issue I see is that when you buy the land, there will be a land value and a timber value, and to make money, the timber has to appreciate over what you paid or have a market value of more than what you paid in order for you to make money.  Otherwise, you are just using the money that you saved and spent on the timber when you bought the land, and there is no net gain.

Also, timber can go down in value, as it did drastically over the last 4 years, so there is market risk. 
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Offline Autocar

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Re: Need help generating a business plan 18 yr old
« Reply #8 on: October 10, 2012, 07:38:44 AM »
It's going to be pretty tuff to find any acres at all that hasn't been logged here in Ohio an what there asking for cut over land is nuts.
Bill

Offline brmoore134

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Re: Need help generating a business plan 18 yr old
« Reply #9 on: October 10, 2012, 07:43:18 AM »
Would a forester be able to help me make a estimate of the timber value? So I can compare a profit margin to expenses? Or how can I possibly go about making a rough estimate of gains or losses on the lands worth? I will definitely be checking into every expense and making a very strong business plan over the next few years such as running costs per day estimated profit and losse too.

Offline WDH

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Re: Need help generating a business plan 18 yr old
« Reply #10 on: October 10, 2012, 07:50:17 AM »
Yes, once you find a suitable property, a Forester can cruise and appraise the timber.  It will be the market value of the timber if you liquidated the whole stand in a sale.  You can compare the asking price for the land and timber against what you believe is the land value plus the market value of the timber and decide if there is an opportunity for a gain.  Remember, once you sink the money into the land (the dirt), that money just sits there and you cannot use it.  The only way to access that money is to sell the land.  You harvest and sell the trees and recover the money invested in the timber. 
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Offline brmoore134

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Re: Need help generating a business plan 18 yr old
« Reply #11 on: October 10, 2012, 08:02:09 AM »
Yes that's how I am seeing the investment that I'll spend money n unless u harvest the lumber it will be held up there.

What are some factors you guys can give me I may not see coming or have over looked?

Offline terry f

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Re: Need help generating a business plan 18 yr old
« Reply #12 on: October 10, 2012, 12:30:32 PM »
     Here is my plan for you, for what its worth. Go to town and get a 15 dollar an hour job, continue to live at home, save every penny, and at the end of the year you should have $20,000. Take that money and buy a lot, could be 2 or 10 acres, don't know what the prices are in your area. Learn which trees to keep, and thin and firewood the rest. All you need is a chainsaw, pickup and a good back, don't even think about sawlogs yet. Sharpen your chainsaw skills and sell every stick of wood you can, make it look like a park. Keep your day job and keep liveing at home, do the same thing next year, either sell your first lot or just add to it, nothing wrong with collecting land. Do this for 5 or 10 years, then start buying equipment, or a mill. Remember, at $10,000 an acre, 50 acres is half a million, probably not doable, at $2,000 its $100,000, probably can do it in less than 5 years, you'll be 23. I can tell you that in the next 10 years, life happens (wife and kids) and you'll have a 20 year period where you won't have a 20 dollar bill in your pocket, so you better do it now.  Good Luck

Offline Phorester

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Re: Need help generating a business plan 18 yr old
« Reply #13 on: October 10, 2012, 12:55:57 PM »

I admire your thinking process.  Good for someone your age.

I think Kansas and Terry have put forth good ideas to pursue.  Working first for another logger will get you the experience and knowledge to address the "other factors I may have overlooked" you're rightfully concerned with.

When it comes time to find out if a property had enough timber to justify purchasing, remember that you will have to pay a forester for a timber appraisal,another expense. But it will certainly be worth it.  You might find one that's willing to give you a free quick-and-dirty verbal assessment on property you're looking at as to whether he thinks the timber is worth appraising before he contracts to do it.
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Offline 1270d

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Re: Need help generating a business plan 18 yr old
« Reply #14 on: October 10, 2012, 06:44:27 PM »
I would take a serious look at kansas's advice to work with someone for a while.  Before launching yourself financially into a land deal, find out if logging is for you.  You would probably know within a few months if it was a job that suited your personality.  During this time you could learn and practice safe felling technique. There is no timber worth your life.  There is also a lot to be learned about bucking for grade on log trees.  Presumably the tracts of land you would be interested in would be holding a considerable amount of saw timber.  Logging pulp only would probably not be profitable. 

Offline Ianab

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Re: Need help generating a business plan 18 yr old
« Reply #15 on: October 10, 2012, 08:07:28 PM »
I'd also suggest working as a logger for a while. You want to buy a skidder? Do that first, then contract yourself out, earn more per hour, pay for the skidder and then save for the land. The experience and contacts that you are making in this time will be the difference between success and failure. Learn as much as you can about forestry, and the business and marketing side. Working in the industry, and taking notice of what's going on around you, and you will soon learn to spot a valuable tree from firewood.

Then after you get your land, you still have the skidder, and can continue to work outside contract work as needed. You aren't reliant just on what the land can produce.

Other thought, "value added". A decent size tree can leave your gate, and you get paid maybe $100 for it? Fair enough. A few trees a day, and you are making a modest living. But one tree could build a set of outdoor furniture, and sell for $1,000. OK it takes you more time and equipment, but now you only need to harvest one tree a week, instead of 10.

One tree a week off your 40 acres becomes sustainable, you don't run out of trees. Harvesting 10 a week, after 12 months all the good trees are gone, wait another 20 for more to grow. 

Above all, be flexible. having a plan is good, but things change, opportunities come up. Your ideas change. You need to be in a position to take those opportunities when they come along. Exactly where you end up in 10 years may not be the same place as you are aiming for now. Hopefully you will be richer, both financially and in knowledge / experience.

Good luck

Ian
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Offline brmoore134

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Re: Need help generating a business plan 18 yr old
« Reply #16 on: October 10, 2012, 10:08:08 PM »
Thank you for all the comments guys and keep any idea's coming. I really appreciate all your efforts. In the years I am saving money I plan on attending all learning events put on by the Ohio forestry association and my last year of saving find a logger to help. I have looked recently into getting land and have found 40-50 acres for 40000 with no housing and the about all of it is wooded. I am willing to move to where I buy the land if it is land worth the effort of cutting and logging.  And like read above I will spend 10000 to 20000 on a skidder in good condition. And another 5000 in equipment most likely. I would also have to have some sort of housing which I would probably use a house trailer. Heating I would use a wood burner because I would hopefully have enough time or have make it to harvest dead wood for heating.

So probably looking at 75,000 in savings but in 3 years it is a possible goal. I am living at home and currently working for companies involved in the marcellus shale boom in Ohio. If anyone from Ohio knows of a logging crew I may be able to work with in Ohio please let me know.  :)

Offline brmoore134

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Re: Need help generating a business plan 18 yr old
« Reply #17 on: October 12, 2012, 02:52:32 PM »
I may have thought of some plans to get experience falling trees and thinning land. These are until I find a logging job. I used to work for a beef farm when I was in high school. And the farmer has a lot of acres most open pasture but he always has tree's he wants cut out. I am going to ask him if I can cut the wood from his property that he wants removed. I will sell the tree's for firewood to make up for fuel costs. The equipment I have so far is chainsaws, and a truck that is reliable. If I need other equipment I would have to get a four wheeler and a log arch but if it comes to that I will invest in those items. I would need a arch so I wouldn't tear his pasture land up dragging logs through fields. So I would most likely have to get a log arch.

What size four wheeler and log arch would be able to handle most of the logs I encounter?

And anyone know of some tree harvesters near Salem Ohio area?

Offline drobertson

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Re: Need help generating a business plan 18 yr old
« Reply #18 on: October 12, 2012, 05:22:10 PM »
I scanned the post, an everyone is on tract, If you buy land you will need to harvest every bit of the timber to make it. You will need to have the markets lined up and make it happen.  All I know, is that if you have not been in the bussiness, you are at risk. It is cut throat, meaning not allot of friends will be there to cover the bill at the end of the day.
only have a few chain saws I'm not suppose to use, but will at times, one dog Dolly, pretty good dog, just not sure what for yet,  working on getting the gardening back in order, and kinda thinking on maybe a small bbq bizz,  thinking about it,

Offline brmoore134

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Possible to still make a living from forestry/logging
« Reply #19 on: October 13, 2012, 10:57:22 AM »
Is it possible to create a living if you buy say 40-80 acres of land and full time harvest it? With no employees just solo harvesting. And at the end of harvesting those acres do you think you could money manage enough to buy more land? Maybe you could put some cabins on the ground and use the land already harvested for people to rent the cabins for hunting.


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