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Can I get perspective on a job?

Started by True North, June 11, 2009, 02:27:54 PM

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True North

I have an opportunity to do some custom sawing at a larger mill operation. He is willing to let us set up there on-site, and do smaller custom jobs that he does not really have time for. He has one where he quoted a person $0.20 per bf to saw 1"popple for paneling (10 cords). We are using a Timber Harvester fully hydraulic mill with a 25 hp diesel. Do you think we would make out ok at this price. My thinking was to do this job for 0.20 to get started and see how it goes. If need be we could say that we need more on the next one. I'll probably be doing some alone, and will get someone to help some too. Any suggestions?

Ernie

Here in New Zealand, we work in cubic meters.  If my calculations are correct there are 423.78 board feet to a cube.  At .20 per bd ft, that is only $84.75 per cube.  We wont set up for less than $150.00 per cube or .354 per bd ft and that is with the customer as off bearer and log loader into the mill.  Sometimes, we even get the client to pay for petrol (gas) :) :) :)
A very wise man once told me . Grand children are great, we should have had them first

Cedarman

Depends on how fast is goes.  Who has the privelage of edging the lumber?  Why not give it a shot.  Keep as good of records as you can to see how much money you make or lose. Once you know the numbers, then renegotiate.  If you can still do other higher profit jobs and do these when you have nothing else to do,then you are making money.

I call a job like this research and development.
I am in the pink when sawing cedar.

Sprucegum

If he was willing to do it for 20 cents before you came along there should be an opportunity for you to at least break even. Nothing like getting paid to learn  ;)

John Bartley

At $0.20 per bdft, you've got to saw 300 bdft per hour to make $60 per hour. If you can saw a steady 300 bdft per hour all by yourself without having to pay your own helper, then go for it ..... I can't. To pay yourself $60/hr and a helper $20/hr, then you've got to saw 400 bdft/hr.

Can you saw that much?  How much per hour are you willing to settle for? If it's a good job, why doesn't someone else already have it?

Just some thoughts......

cheers

John
Kioti DK35HSE w/loader & forks
Champion 25hp band mill, 20' bed
Stihl MS361
Stihl 026

ARKANSAWYER


  I started out at $0.20 and now up to $0.25 bdft.  If the logs are bucked off and the mills loader can bring them to you then you will do OK.  But if the logs are a bunch of junk then you will work very hard for your coin.  With the price of fuel and blades You should be looking more up to $0.30 to $0.40 now.   Most large mills here figure their sawing cost at $0.25 bdft.
  Nothing like getting your feet wet and this is a fairly small job so you will not lose to much on it.
ARKANSAWYER

beenthere

Sounds like this guy isn't willing to saw for 20¢, as he asked you to come do it for him.

Seems a toss-up how you want to choose the risk.
a) Say you will do it for 20¢, then feel you need to back out before the job is done because you are losing money.

b) Say you have to have more and risk him getting someone else to come in for 20¢.

c) Say you will do it for 20¢, and then lose money while sticking to it and finishing the job.

Seems you should figure out what you want so you can be happy in the end. You will likely have to support your mill and your travel at this site as well.  Can you use their log handling and lumber handling equipment? Is your mill going to be safe at this site?
  The size and quality of the aspen logs will have a lot to do with how sweet 20¢ a board foot is too. Small diameter and crooked logs will not make much panelling. And you will only get paid for that lumber that does make panelling, I presume.  
Lots of questions and things to think about.  :)
south central Wisconsin
It may be that my sole purpose in life is simply to serve as a warning to others

cheyenne

If he won't cut for 20 cents why should you. And he's already there & setup.....Cheyenne
Home of the white buffalo

blame

i totally agree with Cheyenne..... if it was going to be a profitable job he'd keep it for himself.   

Tom

Member, Custom Sawyer, does this very thing.   He started by sawing the oversize logs at a mill and has been a growing concern ever since.  Sawmilling is hard work, I don't care what you do.   

My concern would be that the sawmill would be charging 40 cents and sending the guy to you for 20 cents, skimming 20 cents off of the top.   If you are in charge of the entire operation, it sounds like a good deal to me, though you might consider a fuel surcharge or go up on price to cover those types of things. I charged 20 cents a bd ft when fuel was 80 cents a gallon.  Now it is three dollars a gallon and unstable. 

It sounds like a good way to get your foot in the door and it might turn into a real job.  Being on his premises allows you to set up stationary and not have to pay commercial property taxes.  That's got to mean something.

A good question to ask is about insurance.  You need to be covered and he will probably require it.

Stay Independent, don't let it become a partner thing.

DanG

Those things Tom said!  What CS is doing is sawing the oversized logs for a big mill.  I don't feel too uncomfortable talking about him, because he is just too DanG busy to speak for himself.  Even at what most of us consider a bargain rate, and paying 3 employees, he is making a go of it.  The saving grace of his operation is, the logs are brought to him and the lumber carted away.  There is no procurement or marketing to do, just saw the DanG lumber, take your money and go away!  He has a LT70 with every upgrade and extension in the book, and is beating the pore little thing to death, but is posting some incredible figures for a "portable" bandmill.

I say, "Go for it!!"  Get in there and do the best job you're capable of and make yourself indespensible to them.  20¢ per bf can make you a lot of money if you can turn out multiple mbf per day!
"I don't feel like an old man.  I feel like a young man who has something wrong with him."  Dick Cavett
"Beat not thy sword into a plowshare, rather beat the sword of thine enemy into a plowshare."

woodmills1

I would also say this might be a chance to get started, if the logs are ready and will be loaded for you and you don't have to make stickers and/or sticker stack the lumber.  Also, try to negotiate some understanding that if you hit nails or metal the price goes up.  I started with an LT40hd at 30 bucks per hr and got up to $60, now with the 70 I am still at 60/hr till the learning curve levels, but might go to 80 or 90
James Mills,Lovely wife,collect old tools,vacuuming fool,36 bdft/hr,oak paper cutter,ebonic yooper rapper nauga seller, Blue Ox? its not fast, 2 cat family, LT70,edger, 375 bd ft/hr, we like Bob,free heat,no oil 12 years,big splitter, baked stuffed lobster, still cuttin the logs dere IAM

gary

It sounds like you have the same mill that I have. I lost money at .20 bft . 

John Bartley

Quote from: DanG on June 11, 2009, 11:56:28 PM
  20¢ per bf can make you a lot of money if you can turn out multiple mbf per day!

Dan,

Not trying to be argumentative, but how do you make a lot of money at $0.20/bdft? Math doesn't lie, and to make $60/hr at $0.20/bdft, you've got to cut 300bdft/hr. How many of us can do that without hiring an employee and/or burning ourselves out?

When I bought my mill, I did some serious cost accounting. I am a retired business owner with an accounting and mechanical background as well as having spent time as a machine shop employee and a contract gold miner, so I'm familiar with both numbers and hard work. I figured that the cost to run my mill as well as budget for mill replacement due to consumption (wearing it out) was $25-$30 per hour. At $60/hr, the best you can realistically hope to gross for yourself is about $30-$35/hr which is barely a livable income these days.

How much money is considered to be "lots of money"?

just wondering

John
Kioti DK35HSE w/loader & forks
Champion 25hp band mill, 20' bed
Stihl MS361
Stihl 026

WH_Conley

If I understand right 10 cords comes out to about 5 thousand board ft, 2-3 days sawing at most. That is not too much to test the waters with. A small job like that can't hurt you too bad. Might turn into a pretty good gig. Like has been said before, what he is providing as far as material handling can make a world of difference in production.

I get .25 cents a foot, at my place where I provide everything and make some money. I provide support equiptment that costs as much or more than my mill. Have one guy cutting my price at that.

I would try the one job, then evaluate the bottom line. Above all, on a small job like this, finish the job, don't quit in the middle, even if the other guy sees you are losing money. Your reputation will amount to more than the job.

John beat me to posting. One thing to look at about the bottom line is local economy, around here (Eastern Ky.) $30.00 per hour would put you in the upper income bracket. Nice houses rent for $250-400 per month. Locl economy has a lot to do with the bottom line.
Bill

Chico

TRue North I agree with Wh it may be a blessing in disguise we used to let small mills have some of our small orders and larger logs Not because we couldn't make money on them but because of the time frame of getting to them and the person wanting/needing them faster than we could get them this mightnturn into a good job if he furnishes the handling debarks the logs for you you;ll save time on saw changes and if you a single oper you be sawing when normally you ;d be out running a lift or looking for logs or delivering lumber jmo
Chico
My Daughter My sailor MY HERO God Bless all the men and Women fighting for us today If you see one stop and thank them

backwoods sawyer

Another thing to keep in mind is if it does turn steady, you are not spending all those hours making $0.00 an hour.
Backwoods Custom Milling Inc.
100% portable. . Oregons largest portable sawmill service, serving all of Oregon, from our Backwoods to yours..sawing since 1991

DanG

Quote from: John Bartley on June 12, 2009, 07:11:01 AM

Not trying to be argumentative, but how do you make a lot of money at $0.20/bdft?

Well John, you couldn't make much if you only cut 300 bf/hr.  I don't feel comfortable talking about his figures right here in front of him, so I won't lay out any numbers.  I'll just suggest that you apply some simple multiplication to that footage figure and try it again. ;)  I don't know how much per bf he is charging his customer either.  I just know that 20 cents would add up to a really nice check every week with the footage he's cutting.

Good point, backwoods.  The key is keeping the blade in the wood.

To sorta corroborate what I'm saying here, I'll use the Shootout as an example.  At Sawlex, back in '05, I watched the Woodmizer team knock out 400 bf in a hair over 20 minutes, and they didn't have half the support setup that CS has.  That comes out to almost 1200 bf/hr, which would be $240/hr, gross.  I know that is kind of an "in your dreams" figure, but you can do a whole lot better than 300 feet if you're set up well. :)
"I don't feel like an old man.  I feel like a young man who has something wrong with him."  Dick Cavett
"Beat not thy sword into a plowshare, rather beat the sword of thine enemy into a plowshare."

ARKANSAWYER


  I play with a LT70E and 800 bdft an hour is not hard to do with an edger and we charge $0.25 bdft.  That is only 5,000 lbs an hour that has to be picked up and stacked.  With "Wanda" and a helper I could average 250 bdft an hour with out any problem.  I make a living as poor as it is.
ARKANSAWYER

WH_Conley

Now Arky, we both that a "living" is as poor as you want it to be.
Bill

woodmills1

what with all the log pick ups i have now I like the 70's ability to do in 3 hrs what was an all day event with my 40.  and BTW who is cleaning my garage. :D :D :D
James Mills,Lovely wife,collect old tools,vacuuming fool,36 bdft/hr,oak paper cutter,ebonic yooper rapper nauga seller, Blue Ox? its not fast, 2 cat family, LT70,edger, 375 bd ft/hr, we like Bob,free heat,no oil 12 years,big splitter, baked stuffed lobster, still cuttin the logs dere IAM

John Bartley

Quote from: DanG on June 12, 2009, 11:09:54 AM

Well John, you couldn't make much if you only cut 300 bf/hr.  .............  That comes out to almost 1200 bf/hr, which would be $240/hr, gross.  I know that is kind of an "in your dreams" figure, but you can do a whole lot better than 300 feet if you're set up well. :)

Dan,

Thank you for the answer. It sorta' answers what I asked, and I see where you're headed, but rather than hijack the original thread with more questions and discussion, maybe I'll cruise the search function for related threads.

cheers and thanks

John
Kioti DK35HSE w/loader & forks
Champion 25hp band mill, 20' bed
Stihl MS361
Stihl 026

DanG

Looking back to the old threads is great, but it is also good to continue the new discussions.  You can find some pics of Customsawyer's mill in my gallery.  They are a couple of years old, and there have been major upgrades since then, though it looks pretty DanG slick in the pics.

I hate to keep harping on CS's stuff, 'cause he's gonna get the big-head if he sees this.  But the original question here outlines exactly the way CS got started.  His operation is the ideal example of what can be done when one works hard AND smart. ;)
"I don't feel like an old man.  I feel like a young man who has something wrong with him."  Dick Cavett
"Beat not thy sword into a plowshare, rather beat the sword of thine enemy into a plowshare."

Fla._Deadheader


From 1 road trip Ed and I took, it looks to me like there is plenty of opportunity, IF one looks into offering services that are not presently available.

  Custom Sawyers operation is one.

  We were nearly kidnapped from a Restaurant, in Georgia, by a guy that saw opur mill in the parking lot, and hunted us down.

  He wanted long stuff sawn into beams, and was NOT taking no for an answer.  I believe Tom had an encounter with him, as well.

  I say, talk to the mill at .25 bd/ft, and see what HE provides. Take the job, if interested and see what else you can do FOR HIM. If it doesn't work out, put in a word that after such and such time or job is done, you are pulling out.

  We started out new and only wanting to find a better market for what we were doing. Built a mill, and got pressed into custom sawing. Went clear up to Macon Ga. and had people wanting us to saw immediately. NOT interested was not heard by those needing our services ???
All truth passes through three stages:
   First, it is ridiculed;
   Second, it is violently opposed; and
   Third, it is accepted as self-evident.

-- Arthur Schopenhauer (1788-1860)

DanG

I think it is important to establish your business relationship right away, if you decide to take this job.  They need to understand that you are an independent businessman, and they are your customer.  If it turns out to be a long-term relationship, it is all to easy for them to start thinking of you as an employee, and start jerking you around.  The businessman/customer arrangement keeps you on equal footing with the other mill owner.
"I don't feel like an old man.  I feel like a young man who has something wrong with him."  Dick Cavett
"Beat not thy sword into a plowshare, rather beat the sword of thine enemy into a plowshare."

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