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Author Topic: Advice on starting up a small scale logging/milling operation  (Read 838 times)

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Offline Mrobinson525

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Advice on starting up a small scale logging/milling operation
« on: November 12, 2017, 09:02:50 pm »
Hi all, I've done some perusing on other posts and boards related to this but i'd like to get some more specific answers to my situation.
I'm located in eastern Iowa and I have recently started getting more serious about starting a small scale logging operation. This is something that was always a bit of a pipe dream to me. I have a drive to be in the timber, I've always loved being in the timber and spent a lot of time out there so I'm not a totally out of my league. But now I have a buddy wanting to partner up and get real about it. Not only would I like to start felling timber but I'd also like to invest in a saw mill to start milling the trees I take down. Not sure right off the bat that this would be my full time gig, i would keep my current construction job and do this on nights and weekends until i can build it into a full time operation for me.
Currently I lack a lot of equipment and space, all things I'm trying to line up with the more I know about the business. I posses a Stihl MS 391 with a 25 and 18" bar plus a diesel pickup, and a small bit of land a farmer owns to cut on. it's bare bones for the time being.
Initial investment plans would be in a dump trailer, skidsteer w/ grapple bucket, a few more used saws, a decent used sawmill. Not to mention a place to do all this and dry rough sawn boards.
I don't know the first thing about turning this into a profitable business venture, including aquiring trees to cut, and selling of my finish products. Any words of advice would be greatly appreciated.
Thanks,
Matt

Offline BargeMonkey

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Re: Advice on starting up a small scale logging/milling operation
« Reply #1 on: November 12, 2017, 10:34:55 pm »
 Unfortunately it's gets out of hand and expensive quick. The one thing I wouldn't go cheap on is a decent mill, if you plan on sawing alot. Hydraulic turner, mudsaw, decent rollway, thats where your saving time and not killing yourself. Piles of low hour mills out there for 1/2 of what they sold new for. An auxiliary edger is always nice if your doing alot of rough cut such as board/baton. Doesn't matter the brand of saw, just that you can get service. I see alot of guys who try and make 1 machine do it all, such as a skidsteer and it turns into not doing much of anything great, they work great on a landing for piling or in the mill yard but to skid any real production they don't hold up, plenty of older jacks /franklins around and still smaller sized. Good luck. 👍

Offline mike_belben

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Re: Advice on starting up a small scale logging/milling operation
« Reply #2 on: November 12, 2017, 11:58:13 pm »
I think youd be wise to pick one.. Being a logger or being a sawyer, initially.  Theyre both pretty big endeavors with a lot of overhead and margin for error.  Diving into both @ once just worsens your odds of making money imo.

I only know logging so ill try to help you there.


I feel strongly that a one man startup operation with small equipment isnt gonna be able to put enough board feet on the trailer per day to break even in low grade, small diameter timber.  Low grade is low rate so you have to move it fast and that means lots of single purpose equipment to move big volume.  Its the wrong way for you to start because you have years of mistakes to make before gaining proficiency.  You cant make mistakes in low grade wood and still pay for the machines, Pulp is for pro's who already have the trucks, loaders, and road building gear. 

Your beginners speed will only be profitable in bigger diameter, higher grade wood, 14-16" and up.. Where you can get it wrong and still make enough money to put fuel and hydraulic fluid in the machine for tomorrow to try again. The longer the log the better the rate and easier the sell.   If i cut a rough looking 20" zero side clear white oak at 16'6 i can get 46 cents per bd foot as a switch tie.  But if my bobcat cant lift it (which my 742 definitely cant) then i have to cut it back to say 9'3 and take 39 cents.  Plus i now have an unsellable chunk of wasted wood.  The rate dropped and i wasted wood and i now find the limitation of a machine i just went broke on.  These are the steep parts of the learning curve.


If i go knock on doors as a logger i have to either buy standing trees (pros only, dont try to start that way) or on a split payment with the landowner.  Lets put some real numbers on that.. If i cut a red oak with 14" dbh and get three ten foot sawlogs with 13, 12 and 11" small ends ive got 122 board feet.  Lets say they all make tie @36cents.   The mill buys this for $43.92 and then you give the landowner half.  Lotta work and equipment for 20 bucks.  What if you had to skid it a 1/4 mile or winch it up a gulley?

If you tailor your startup to get the trees for free and not be building roads off into the hollar, atleast in the first years, youll have a better chance to survive.  I tell people who dont have a logger grandad to show them the ropes, to start with a dozer and do ponds/clearings/pads on residential land. Charge by the hour, get trees for free.  Learn the local markets and transition to pure logging from those proceeds.   Or set yourself up for storm cleanup, or as a tree service.  Charging for the tree gives you the maximum room for error on other aspects while youre learning the logging/milling business. 

If youre gonna go bobcat go big and plan on tracks.  I prefer a stump bucket with grapple over a brush grapple for logging.  But if youre gonna go after long skids in rough terrain itll stink, theyre very unstable in the woods and way too light for full time timber. 

Dozers make slow skidders but theyre great road builders.  If yer gonna be a really real logger someday, yer gonna be building roads to get the trucks and slasher in... Might as well just get the dozer first. 

Neither a skidder or dozer can load.  Forks on a loader with hydraulic thumb is king for wheel loading.  But a bypass grapple on a knuckleboom is better still.  Spinning logs around is tedious and takes lots of room for wheel or track loaders.  Piece of cake for a log loader.

If i could only afford one single machine and wasnt certain if logging was gonna pan out, i would buy a 450 sized crawler loader (im partial to case) with a drot bucket, then build a grapple fork for it.  Id put a winch on back and get a 10ton pintle equipment trailer to move it to the job and put standards on that for hauling logs to mill.  So one trip with truck trailer and machine gets you onto the job.  When i finally landed a good job with a long skid, Id build a bunk trailer to drag out into the woods with so i could haul 6 or 8 trees out per run vs one or two.  You really want to minimize hours on undercarriage.  Budget wise, $3k will buy the tag trailer and $10k will buy the machine.  This will skid and load a 20" diameter 20ft oak no problem.  Even if its only tie grade, thats a $115 log and you can survive on those.

It wont take long to realize a 1ton pickup is pretty dangerous with 1000 board feet behind it.  I personally would upgrade to a medium duty dumptruck first.  You can haul in rock, haul out dirt, firewood or sawlogs and if logging doesnt work, well.. Youre a turn key dirt contractor.  If logging does work youll still use a dump truck now and then.


Bare in mind this is all cheap old antiquated equipment..  get you started as cheap and low risk as possible to start learning the ropes.  It will not compete with a skidder and knuckleboom in any way.  Youd upgrade to full time committed logger equipment as the timber paid you to.  Then Live happily ever after.

The end

Offline mike_belben

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Re: Advice on starting up a small scale logging/milling operation
« Reply #3 on: November 13, 2017, 12:06:54 am »
... Just kidding!  Chapter 2 is about what DOT will do to you when youre on the side of the road changing a tire and they pull up for a welfare check... And ask for your CDL and logbook. 

Any 10k rated trailer.. Even empty.. is fast becoming class A territory.  Im not talking hearsay.  I got put out of service, towed, criminal charge, court, plea bargain and fined for an empty gooseneck going to my own eviction. 


If you wanna be a logger, go get your CDL now and get a job driving log truck for an outfit.  5 years from now ill be asking you for advice. 

Online TKehl

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Re: Advice on starting up a small scale logging/milling operation
« Reply #4 on: November 13, 2017, 09:59:04 am »
Starting with nights and weekends and keeping day job.  YES YES YES YES YES!

Determine your market before jumping in with both feet or taking on debt.  Neither the bank, insurance company, or grocery store will take a stack of lumber as payment.

Expand as the equipment pays itself and keep debt load low.

Starting out, Id be more about a 4x4 tractor with stout loader then add a 3 point winch.  Good enough in flatter woods and easy to service, transport, and resell.
Lucas 6-13+slabber, Mr. Sawmill bandmill, orange chainsaws, JD SSL, Case Backhoe, farm tractors, trailers, and 150ish acres of trees.  Fledgling woodshop with CNC router, laser engraver, Woodmaster 712, and a Berlin 108 moulder (project).  Oh, and a lovely (patient) wife and four offbearers.

Offline Mrobinson525

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Re: Advice on starting up a small scale logging/milling operation
« Reply #5 on: November 13, 2017, 10:20:07 am »
This is great guys, I really appreciate it all. In terms of the CDL, I already have a class A with endorsement for doubles but do not own any of my own trucks. I feel that licsensing will bennefit me. As for the equipment I'm just taking it all in at this point, I really plan on spending the next 6-12 months putting together my business model rather than being impulsive and buying something this week. So keep it up gents, I'm happy to take all the help I can get.

Offline Puffergas

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Re: Advice on starting up a small scale logging/milling operation
« Reply #6 on: November 13, 2017, 12:28:37 pm »
I agree about the track loader and drott bucket but they can tear the ground up. I like being in the woods the most but end up traveling too much and the constant hunt for timber etc. Hate being on the road with trucking problems. So I would start with just the mill with a fork lift on the back of an old truck. You have to be able to lift  thousand green foot second lift high on a trailer.
Jeff
Somewhere 20 miles south of Lake Erie.

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Offline Crusarius

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Re: Advice on starting up a small scale logging/milling operation
« Reply #7 on: November 13, 2017, 04:24:12 pm »
Be careful with partnerships. I know many ppl started out great friends, started a business together, then they started having varying opinions had a huge falling out that hurt everyone and have not spoken to each other for years.

Everyone i have known to get into a partnership with a good friend has ended up like that. It is better if 1 person owns the company and the other is an employee. But that still causes issues just makes the issues easier to overcome with a lot less financial destruction.
I knew what I thought I meant.

Offline Ed_K

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Re: Advice on starting up a small scale logging/milling operation
« Reply #8 on: November 13, 2017, 07:31:20 pm »
 The business plan is the most important part of a business. You'll need projections for 1, 3, and 5 yrs minimum. You can get books from the local library that help with writing a business plan. I have one called Business Plans Made Easy  by Mark Henricks that helped me when I first started. The least of which you'll need to talk to a banker.
 Good Luck.
Ed K

Offline longtime lurker

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Re: Advice on starting up a small scale logging/milling operation
« Reply #9 on: November 14, 2017, 06:30:42 am »
What you have to do first and foremost IMHO is assess your resource.  Logging, milling, or both to be successful you require equipment that is suited to your logs and market.

There's a difference between tree, trash, pulp, tie log, sawlog, veneer, pole etc etc.  What your resource gives you and where it grows (swamp/plain/hill/steep slope) determines what markets it may suit and what you need to remove it from the forest. No good having a swamp dozer when you need a forwarder.

Then you need to figure buyers and buyer preferences.  No good having gear optimization for CTL if the local mills want tree length for example.

From a milling viewpoint its kinda the same. The mill you want for monster DF size logs isnt the right mill for pecker poles isn't the right mill for walnut.  A mill has to be able to process  80% of the logs you meet efficiently to pay.  There is an exception around that: if you log and other mills take the 80% then being set up to process the other 20 can be sensible.  There can be real good money in sawing oversize logs, the issue with them is getting regular supply If you got market for the normal stuff you can cut enough volume to feed your own for free almost.

Other than that there's a lot of good advice above .
The quickest way to make a million dollars with a sawmill is to start with two million.

Offline Mrobinson525

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Re: Advice on starting up a small scale logging/milling operation
« Reply #10 on: November 15, 2017, 10:06:45 am »
OK one big question I still have is how to obtain standing timber? Do I put out an ad for clearing timber or do I purchase land to cut on? If I go clear timber for a landowner or a farmer, do I charge for my services and just walk away with the logs or do I pay them for the timber I'm removing based on the type and quality of the timber? I guess that's one of the big ones I'm still scratching my head on

Offline mike_belben

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Re: Advice on starting up a small scale logging/milling operation
« Reply #11 on: November 15, 2017, 10:11:43 am »
Do you live in urban, suburban or rural area?  What are the average lot sizes in your town and how many mills are there nearby?  How many logging outfits?  How often do you see semi trucks hauling logs?  Is there a lot of commercial forest near you?

Online TKehl

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Re: Advice on starting up a small scale logging/milling operation
« Reply #12 on: November 15, 2017, 10:54:58 am »
Yes, location would help. 

East Iowa isn't known for it's forests.   :)  But I'd imagine there is still good timber to be had.  This can actually work to your advantage as there probably aren't many loggers to compete with.

I'd start talking with anyone you know that has land and tell them a little of what you are looking for.  Here is a link to MO stumpage prices that should help. 
https://mdc.mo.gov/sites/default/files/downloads/TPTAprJun2017.pdf

Land clearing is most always low value junk.  If it could be logged, most it would have been.  Exception is for building sites and such.

If you want timber, I'd get a mill and start advertising that you will cut on shares.  Will probably have more than you want pretty quick.   ;)
Lucas 6-13+slabber, Mr. Sawmill bandmill, orange chainsaws, JD SSL, Case Backhoe, farm tractors, trailers, and 150ish acres of trees.  Fledgling woodshop with CNC router, laser engraver, Woodmaster 712, and a Berlin 108 moulder (project).  Oh, and a lovely (patient) wife and four offbearers.

Offline Mrobinson525

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Re: Advice on starting up a small scale logging/milling operation
« Reply #13 on: November 15, 2017, 11:03:16 am »
Yes, I do live in an urban area (90,000 metro area population) however about 5-10 minutes and you're in the country. Primarily agricultural land within the county and near by. But you're right TKehl, there is limited competition. From what I know only about 5 or 6 logging and 5 more milling operations in a 40 or so mile radius, none of which are very large operations. There isnt really any large commercial forests in the immediate area either that I know of.

Offline BLink

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Re: Advice on starting up a small scale logging/milling operation
« Reply #14 on: November 15, 2017, 11:55:50 am »
As was previously stated;
"Be careful with partnerships. I know many ppl started out great friends, started a business together, then they started having varying opinions had a huge falling out that hurt everyone and have not spoken to each other for years."

A good book to read is The E-Myth, by Michael Gerber. This is where I wood start.
There are a lot of Old Loggers.
There are a lot of Bold Loggers.
But there ain't a lot of Old, Bold Loggers!

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Offline Crusarius

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Re: Advice on starting up a small scale logging/milling operation
« Reply #15 on: November 15, 2017, 12:02:56 pm »
blink any chance you can give a quick summary on the book?
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Offline mike_belben

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Re: Advice on starting up a small scale logging/milling operation
« Reply #16 on: November 15, 2017, 05:21:27 pm »
In general, your subsequent jobs usually come from referral of a prior happy customer.  Youre there doing the nice job you said you would and the guy next door walks over and says howdy.  Or a year later a guy says hey bill gave me your number, said you were great.   The more personable, approachable and professional you are the more business will come in.

If you are green to timber then you must learn the ropes first.  Theres no getting around that step and you need load after load of logs on your truck to do it.   If you have to pay for trees, youre gonna struggle hard unless starting off with a fat wallet.  If you get trees free itll be easier.  If you get paid to take them youve got the maximum buffer while you learn log scaling and grading and selling.   Even if you screw up the cut length on a whole load of saw logs (which i have witnessed 3 times) your diesel money came from the customer who paid you to remove them.  In an urban area id start with a bucket truck and chipper, expand into a 4wd tractor with grapple loader and 3pt winch then develop my landowner contacts while on the tree removal/storm cleanup job.

You know how i find my next logging job?  Delivering firewood.  Get to see the trees and the challenges of each site and get paid for the consultation.  Plenty of people have a "yard full of monsters"  that are all of 11" DBH.  Waste of time going to look.  Hauling firewood gets you invited into a lot of strangers yards.   

Offline Puffergas

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Re: Advice on starting up a small scale logging/milling operation
« Reply #17 on: November 16, 2017, 07:38:24 pm »
We had the best luck bidding on timber from a forester. Saves time and the forester keeps stray land owners in line, of course you have to do good work.
Jeff
Somewhere 20 miles south of Lake Erie.

GEHL 5624 skid steer, IHC 300 Utility, Timberjack 225D, Burg Bandsaw mill