Start-up portable sawmill business

Advice on establishing a portable sawmill service. January 4, 2001

I'm interested in starting a sawing business. I'm leaning towards a portable bandsaw mill and keeping the operation mobile. My questions are:
1. What is the average production of a fully hydraulic mill?
2. Being a startup operation, what is the quickest why to generate cash?
3. What are some resources for determining pricing of lumber and saw logs?
4. What is the average daily cost to operate a fully hydraulic mill?

Forum Responses
I'm starting a business with a Woodmizer. I'm cutting by the hour of saw time because of the quality of the logs. Good logs, good deal for the customer and poor logs, you don't take it on the nose. I've paid for half the mill doing it part time. I saw between 850 and 2700 bd ft per day.

The following is based on my experience operating a WM LTG40HD '96 model, and previously operating a circle mill.

Expect to need:
- 10 gallons of fuel

- 8 hours of labor for a helper to stack and help keep you sawing. Or have the owner help you with the stacking and staging. Explain to them that this will keep the cost for cutting down. Some operators of mobile mills have different rates--one for bringing paid labor and one with the owner working the green end. (Warning: insurance and liability issues here.)

- 4 blades. That is one blade sharpening for every 250-500 bd ft of lumber cut. This can vary tremendously, based on whether you are cutting 1 inch or 2 inch lumber, clean or dirty logs, tramp metal, etc. Depending on your blade tension and sharpening plan you can get 5 sharpenings as a minimum and expect up to 10 on each blade. Blade costs $20-25, re-sharpening $5 each plus shipping both ways. My average was $8 per blade. I sharpen my own now.

- 1 to 2 hours of time spent discussing cutting, stacking, drying, tally and application issues with the owner of the logs, as well as setup, teardown, and travel time to and from.

Production is variable on several factors:
- Size of timber. 20 inch logs straight and true at 16 foot lengths will yield considerably more lumber per hour than 8 inch 8 foot stock in a "by the hour" yield comparison.

- Quality of logs. Straight, knot free logs cut faster than knotty ones. Defects like a rotted heart or split, wind damaged stock will force you to work around the defect, slowing you down. You need to spend the extra time to get quality lumber with poor tree stock. I never refused to cut for someone but certainly advised them not to have 16' 2x6's cut from wind damaged stock or knotty stock.

- Type of timber, ie oak, pine, hickory, elm etc.

I expect to cut 2000 bd ft of 1 inch stock in any given workday onsite. I normally exceed this but use it as a planning number for my financial computations.

I called all the other sawyers in a 100 mile radius and asked if they could cut my lumber onsite and about any special pricing, like setup, moving, and blades, and for how much per thousand. That gave me the market standard for cost for cutting.

There are several ways to set pricing for lumber. I looked in the classifieds of the local agricultural paper. The prices were already advertised for rough cut, dry and green pine, oak, cherry, walnut, and more. They set the parameters for my pricing. I also looked at commercial truckload pricing for my area in the species I am dealing with.

The local commercial timber purchasers and sawmills set the price for sawlogs, by the ton or doyle, depending on who is buying here. Expect to take notes on log size, quality, species and value. Hook up with a local tree service and you may find yourself with tons of "non-saleable" logs, if you can move them. Too big for pulp, too many defects or too short for sawlogs (commercially), but great for sawing knotty siding. Expect to find more tramp metal...ouch!

WORK... WORK... WORK... Okay, not so funny, but true. On site sawing will advertise itself via word of mouth (if you do good work). Advertisement in agricultural papers, local horse trading papers and getting the word out at the feed mill may not hurt either. I would much rather spend a week cutting for a farmer than 5 days on 5 different lawns. Chances are that the farmer will have 5-10k of lumber and result in a referral to some other farmer for another 10,000 feet of work and the residential customer may have 500 - 1000 feet of lumber (3 nails, one spike) and a referral to cut one log across town.

Bigger is better on your sawmill and handling equipment. More hydraulics, more HP, more sawmill, more forklift/tractor/truck. Don't forget cant hooks, extra blades, blade sharpening equipment and chainsaws.

Our setup does not use hydraulics. The WM LT40G25 is the workhorse. This decision was based on the following:

Economics: Manual is cheaper to operate and maintain. Hydraulics may allow you to have less support equipment, but will you need tractors or forklifts for what you want to do? Remember that support equipment is at least half of your cost, if not more!

Operation: Since we are using a 5210 John Deere tractor and/or a 2 ton International winch truck in the yard, a fully hydraulic system does not offer a performance versus cost scenario to justify the expenditure. Since we harvest our material, this equipment was part of the business plan. In addition, you must be able to afford help and make certain help is always there. This is where our tractor plays into the operation. Pecan cut to 2.5 or 5 inch thickness up to 20 ft in length could not be carried without the tractor even with help. The hydraulics on a sawmill do not aid you in removing the slabs. Remember that certain woods such as the hickories, pecan and walnut cannot be cut to 1 inch or less when green. (Radial growth rings will curl, cusp and twist.) So the type of wood you plan on cutting needs to help determine your operations.

Third: If you take your mill to their site, transport will cost you more than just your time and travel; ie, tires, lights, registration and tags plus insurance. Also, road travel bounces your mill--bolts are lost, potential cracking of welds, etc.

Be flexible and figure a 30% overhead on top of what you think it is going to cost you, then consider if you really want to put in the work.

Regarding log and lumber pricing, my state (Tennessee) publishes average prices for logs in a quarterly newsletter. I found it by finding the state government website, then agriculture dept, then forestry division. For lumber, there are organizations like Weekly Hardwood Review publishing average regional prices for truckload quantities.