Question
I am a prospective sawmill operator from southwestern Ontario. I have been reading a lot on a couple of forums, and have been thinking about various rate structures. Some of you (possibly many of you) may find one idea I have crazy, but it should create discussion. What do you think of charging per cut as opposed to board foot? Example: $2.00 per 8 foot board and if customer doesn't want to pay for board, it goes to sawyer. I know there will be some discussion around cutting smaller boards (2x4, etc.). Size of board and type of wood are definitely factors.
Forum Responses
(Sawing and Drying Forum)
From contributor L:
I think you may very well scare customers with that price. If a 1x6x8 took 2 cuts to free from the log and then to edge, that's 4 dollars for 4 bd/ft. I saw the same board for 80 cents. Not sure many would use your service.
I can buy most lumber cheaper than a buck a foot and by pruching I keep my logs for firewood before paying that. You wouldn't do much good around here (Tennessee), but who knows what the market will bear in your area.
I edge all boards needing edged and all by the bd/ft price when I do it for others. I do think it would be wise to have two prices depending on whether you're sawing 1 inch or 2 inch, but every board seems excessive. In fact, I think it's too excessive to work in my location.
At your rate who would pay for the slabs that come off without making a board? You will have at least four of these on every log. I think any milling operation will do better making things as simple as possible. Make it too complicated or too expensive and you will scare customers away.
Being fair to people and helping them make the best decision when it comes to sawing their logs will get you business. People need to save money or why even bother with your service? Just go buy lumber and not have the trouble or the mess.
You need to establish a system or set of rules to operate by. If you cut by the hour and you saw up 1000 bdft at 200 bdft per hour, it takes you 5 hours and if you charge $50 per hour, you’ve made $250. But if you charge by the bdft and you get 30 cents or 35 cents, you’ll get $300 to $350 for the same amount of lumber. If you’re new to milling, you may only cut 100 bdft per hour, or less. If you charge $50 an hour then you’re milling rate per bdft is high. And your customer could be upset. But if you charge by the board foot of lumber produced and you make some wrong cuts or wrong sizes, then the customer doesn’t pay for the lumber unless he decides to keep it and puts it in the lumber pile, not the slab pile.
Everyone will say it’s hard to keep track or count up the lumber at the end of the day. There are two ways to do it. One way is to write down each size of lumber on a clipboard as you are milling it (best way). Or stack the lumber in a neat pile, all rows the same width, and measure the whole pile at the end. (Easy to make errors this way, as sometimes long lumber is stacked with shorter lumber).
In my area custom milling pays 35 cents per bdft of lumber produced not log scale tally.
In your area the rates may be lower and then your hourly rate should be lower, if you charge by the hour. I only charge by the hour when re-sawing old timbers. Except for miscellaneous services like pulling and scanning logs for nails. I charge by lumber produced as most band mills will produce an overrun.
If there are mills in your area, call them and ask them what they charge to determine your rate. If you price yourself too high you’ll lose work; if you price yourself too low you’ll be loaded with work and won’t be making the most you could. You should get what the market will bear.
I have a list of questions I ask customers, like: what thickness lumber do you want, what widths, do you want it quartersawn, etc. You need to have this written down and include it with your rate sheet, which states each rate for each different thing. For example: I charge extra for quarter sawing, just 5 cents per bdft. But I also charge an extra nickel for wider than 12” wide lumber due to the need to cut slower to make nice wide boards. Some people want wide lumber, some don’t.
I’ve developed this list of questions based on experiences since starting milling in 94, and getting burned by not stating in writing the charges for extra or different cutting methods and practices. And the rate sheet has evolved also, adding things that were needed and subtracting things that didn’t work. But these need to be in writing and shown to the customer beforehand. If he doesn’t read them or understand them, then you need to ask him the questions, one by one, and write down his answers on the list. Later if something is questioned you can respond with the answer “this is what you told me to do.”
There aren’t a lot of questions but some need to be answered so that you're sure you’ll be making the correct lumber for the customer. It all depends on what the lumber is going to be used for. One customer who wants barn boards will want things sawn a different way than one who wants furniture lumber. Hardwood vs. softwood is also a different set of cutting methods and/or procedures.
Some people will say "whatever you can get out of it." Well, I don’t accept this answer and question them more to make sure they understand, up front, that I’m trying to satisfy their need and make what they want and can use. You don’t want to mill it all one inch thick if he wants 2by stock for building a shed. And you don’t want to make all 2by stock if he wants boards for a fence.
Here is the set of questions I ask the customer for a portable sawmill job:
What thickness do you want your lumber?
Do you want the lumber quartersawn?
Do you want me to make stickers for you?
Happy, well-educated customers will bring you other customers by spreading the word about you. Taking the time to make sure they understand the things mentioned above is so important. Customers saying that ol-so-n-so cut their stuff up, took their money and ran, knowing it wasn't suited for the customer's purpose, hurts you fast. On the other hand, it will help your business tremendously when a customer says "you know, he told me this wouldn't work even though we wanted to try, and I ended up saving 300 bucks listening to him."
However, if you decide to do this, remember three things mentioned above.
1. Educating the customer prevents misunderstandings.
2. Prior to sawing is the time to mention things. You will not keep customers happy telling them one thing, then learning you made a mistake and changing your policies mid-stream. If you make a mistake, eat it yourself and learn from it. Move on and remember when it's presented to you again.
3. Always make the best quality product for the best possible price. Sometimes this means slowing down on a wide cut. Even point this out to the customer. Tell him "I have to slow down to make you, the customer, the best board I can." They really appreciate your consideration to them.
I don't expect to get more than I can handle here in Essex County, but who knows. Our tree count is very low and a limited resource. It looks like contributor J works pretty cheap. That doesn't provide much toward equipment costs.
By the way, I cut through the middle of an old lead bullet in one of the cedars. They came from up north somewhere. Missed the deer, got the tree - a long time ago, I guess.
Comment from contributor A:
There are many other customer satisfaction/profit facters not adressed. Is the sawyer going to handle lumber after the sawing process? Many customers are ignorant about or unable to care for their sawn lumber. I strongly advise, on custom sawing jobs, tat stack and sticker be adressed. Then, should, the educated customer decide to use your labor to acomplish this, there will be less chance of you and others hearing this, "My lumber turned blue, warped, cracked, rotted, etc." Of course, the price goes up.
