In need of business opinions

trey_w · October 14, 2003, 04:44:18 PM

Ok, Some brief background. I'm VERY new to anything having to do with lumber/woodworking. I started woodworking as a hobby about a year ago but I travel so much I rarely have time to do it. I've built a couple of small things and still have all my fingers, but I feel like I'm just starting on the learning curve.

My dad retired about a year ago (not by choice) but due to lack of retirement planning (also not his fault, long story) I need something for him to do. I have some money saved and have been kicking around the idea of maybe starting a hardwood lumberyard. I don't know if I'll cut down my own trees but I'd like to get a Woodmizer and do my own sawmill work and dry the wood myself for resale. I have NO idea what I'm getting myself into. I don't plan on leaving my current job for awhile but would like the business to support me if it can. I've been doing some research and I plan on doing a lot more but I'd really like to hear if... 1. Is this doable? and 2. What questions should I be asking? I just found this site today so I'll be doing alot of reading, but I'd appreciate any help.

Thanks,
Trey

Frank_Pender · October 14, 2003, 08:56:19 PM

Trey, there are some past thread running around here that have almost everythin you are looking for. I am sure Tom will let us know where they are located. ;D

Short thoughts;
Do a resource analysis of:
1. dollars available to feed the startup for perhaps a year
2. market sources for what you are sawing
3. equipment purchasing issies like log handling equipmnet, kiln container and support materials, fall down resedue 9getting rid of it) sawdust,slabs, etc.
4. competition in milling a merketing what you saw
5. space availability for lumber storage, drying,, log decking area adequate to do the job
6. etc.

trey_w · October 15, 2003, 01:16:08 AM

Thanks Frank! I'll check around the boards and see what I can find. I ordered a book today, Harvesting Urban Timber. It seems like a good idea but I don't know if a business could be run completely off of it. I liked the idea of using every part of the tree though.

Percy · October 15, 2003, 09:02:32 AM

Heya Trey
Welcome to the F.F. Go thru Franks list very thoroughly and do as much research as you can. Right now,aside from money made playing guitar in a bar band, sawmilling is my only source of income. It can be done but there is no "one" way of doing it. Everyones situation is unique and the more info you are armed with, the better your chances of sucess.

It can be very difficult, its hard work, the hours are long, BUT, you meet some of the coolest people, you get in shape, you learn what it takes to make a small business profitable. Its a lifestyle more than just a job. I dont have nearly as much money now as when I was an owner operator of a log truck but I wouldnt trade my life now for nuthin.

There is a wealth of info here, not to mention, humor,usefull trivia, useless trivia, hats even... :D :D

Good luck and please give us the play by play as you and your dad develope your business.

Later
Percy

Sven Christiansen · October 15, 2003, 09:10:55 AM

Trey,

As with any business (ad)venture, the more research you do beforehand, the fewer surprizes you'll get later.

We have a resource that might help you (http://www.woodmizer.com/sawmills/profitability.html), but it shouldn't be the only thing you consider. Listen to the wisdom (I may be using that term lightly ;) ;D) of the people here at FF.

OneWithWood · October 15, 2003, 09:40:23 AM

Greetings, Trey.
You will find a lot of good advice on this forum. Frank's advice is typical and on the money. Do your homework. Write out a business plan. I started a project very similar to yours over a year ago. I am still trying to complete my saw barn which according to my plan should have been in operation last May :( ??? :

. Be patient as many obstacles are likely to rear up. Be flexible but keep to the major points of your business plan. If you can envision where you want to be you can get there.

Gus · October 15, 2003, 11:13:44 AM

Welcome aboard Trey. Good guys here with lots of good advise and. . . .well. . . other stuff.
Gus

trey_w · October 15, 2003, 12:33:13 PM

Thanks for the warm welcome gang.

I'm still soaking up information since I can't do much until I get moved from Arizona back to Texas. (Got 2 offers on my house today.

) I'm hoping to start this project after the first of the year, I plan on taking it slow and trying to pay cash for everything that I can. Plus, by taking it slow I'll be able to see if this is going to work or not. ( I sure hope it does! ) I'm still trying to find out what direction I'd like to go in, such as, do I want to rent myself out to saw logs for someone else as well as doing it for myself? Do I want to do custom moldings and flooring? (Just read about that. hehe) Machinery for that may be cost prohibitive though. I'm sure I'll start pulling in my focus before too long, right now there's just SO much to research. :P Thanks for all the great information I've gotten so far!

Trey

Ron Wenrich · October 15, 2003, 02:50:37 PM

I've helped a few guys with start-ups. Franks advise is pretty much on the money.

A lot will depend on where your markets lie. If you are looking at a kiln dried market, I would go with moldings and flooring.

I helped one guy get into the mill business. He tried the logging, doing firewood, green lumber sawmill, and pallets before he settled into making doors, windows and flooring. Its a 2 man operation and they are doing quite well.

They don't produce all their material from wood they produce. They buy lumber from other sources on a green basis, then kiln dry, plane and mold.

Depending on your markets, it may be better to back into the lumber side from a finish side.

A dependable log source is an absolute must, if you are going the sawmill route. I'm not sure that urban trees will supply enough on a consistent basis. I've seen several mills go under because of a lack of logs. Some of them were big operations, some were small...no one's immune.

trey_w · October 15, 2003, 03:44:19 PM

Thanks Ron,
How do you go about finding a reliable log source? I'm assuming that this would be a logging company of some type? And I would still need to cut the logs myself? What's a good source for milling machines?

Trey

Ron Wenrich · October 15, 2003, 06:24:12 PM

Nows a chance to introduce one of our sponsors. Timberking has a planer molder that may fit your bill. Here's the link:

http://www.timberking.com/html/planer-molder-woodmaster.html

Woodmizer also produces a molder: http://www.woodmizer.com/secondary/moulder.html

Of the mills I've worked with, the most successful were those that went out and cut their own timber. That's a sizeable investment - equipment and stumpage.

Your next best bet is to pair up with a reputable logger that will supply you with the type of log that will accomodate your operation. These are hard to find and aren't as reliable as doing it yourself. But, if you're logging, you aren't sawing. If you're sawing, you aren't planing. You gotta set your priorities and these are market driven.

It may be easier to find a stable green lumber source than it is to find a stable log source. Then you don't need a log source to start with. Also, less start up costs in equipment and resources.

Also, think of buying used equipment. You will get more bang for your buck. Paying cash is a good bonus. It takes the banker off your payroll. Here's a link to a ton of used equipment: http://www.sawmillexchange.com/

DanG · October 15, 2003, 07:27:55 PM

Welcome, Trey! You've already gotten some good advice from some really fine and knowledgable folks. I'll toss in my two cents worth, which has already been valued at a penny, in a previous thread. :D

This is a tough business, but one of the most rewarding you could find. I wish I had gotten into it earlier. It isn't one of them things where you can just whack any old board off of any old log and expect a market to just magically appear for it. Study this forum!! Every word that has ever been put here is still here.

When you get moved, you need to pick a starting point for the active phase. Choose this point based on what your situation and resources are. If you are near a population center with lots of trees and lots of growth, you can probably do it all with urban trees, many of them free for the hauling. If you move to an area where there are already a lot of mills, do like Ron W. suggested and buy lumber from them and add value to it in whatever way the local market dictates.
As someone said, you should write a business plan, but you should be prepared to throw it out the window if your business takes a different direction. It is a lot easier to spot opportunities right after you have commited all you resources to something else. :-/
Keep asking questions here. We all learn from them. ;D

ARKANSAWYER · October 15, 2003, 07:56:42 PM

Trey,
When you get to Texas you need to drive north east to Arkansas and spend a week with me. I can put you in ARKANSAWYER 101 sawing course. After just one week you will have your eyes wide open to sawing and all the pleasures that come with it. I touch on many aspects of the joy of sawing and the colorful people who you will come in contact with in the sawmilling world. You owe it to your self to learn form one of the best in the industry for if it is to the top you wish to head you should know who is up there.
ARKANSAWYER

RMay · October 15, 2003, 08:52:30 PM

Trey-w it is doable with a lot of work and you are asking the right questions. I would recommend working with someone to see what its all about . I started sawing three years ago with a WMLT-40 non hyd. . I upgraded to a WMLT-40 Hyd. the 6 of Dec. 2002 and made enough with it to pay it off in nine months working week-ins sawing off site .good luck ;D

rebocardo · October 15, 2003, 10:54:03 PM

Get the wood by removing it for a fee, then turn the free wood into a product you can sell easily on E-BAY. With my free wood, I am trying my hand at firewood (not that GA is the best state for that ...) and sooner or later I will go into planks. Then making custom furniture from the planks.

Urban wood is good because when it falls on a car or house, people and the insurance company want it gone because they can not burn it.

trey_w · October 15, 2003, 10:57:20 PM

I'd like to thank everybody for all the GREAT information! I think my head's going to explode from information overload. :D ARKANSAWYER I'm going to take you up on that offer if I can get off work for a week, I'll bring my dad if that's ok. I will definately need the education.

Fla._Deadheader · October 16, 2003, 06:06:58 AM

  I just gotta add one thing, besides, welcome to the forum.
  Do a search of the sawmill and milling forum, for a story started by one of our successful members, Joey Lowe. He lives in Texican ville, and the questions and fretting over getting started, that he posted, will be like reading yer own horror scope ;D ;D
  Then you can follow his progress and see where he made his decisions.
  He is recovering from surgery right now, but, he did post recently, and I am sure he will correspond with you, when he is more able. GOOD LUCK, ;) ;)

C_Miller · October 16, 2003, 06:34:50 AM

The only thing I wood add to the great advise these guys already gave is to develop local contacts in the biz. The locals can tell you who will help, who needs help and how to fit in your niche market. As far as general knowledge goes this is a great place to axe questions. There is a wealth of knowledge and everyone is willing to share.

C

Frank_Pender · October 16, 2003, 08:28:56 AM

Tey, I did not see in any of the previous posting anything about what you mentioned on cash outlay. You had mentioned that you wanted to pay cash for everything. This may go against the "grain" of some here but...consider stongly the idea of not putting "all" of your cash into your business operation all at once. Go slowly, seek financial council from those who you have faith and trust as well as following your own instincts. It is often a fact that our first instinct is the best. Some of the very best council I have every received is, listen, listen and listen.

Take Arkensawyer up on his offer, for sure. You might also want to see if you can look up other sawyers in the areas in which you are planing on living. and doing busines as well as trying to find Joey Lowe for a visit.

Haytrader · October 16, 2003, 07:40:21 PM

   With respect to all who answered. One thing we don't know about trey, is how much cash he has. He didn't mention this, and quite frankly, it is not our business. He may very well have enough to pay up front for most anything he wants.
   Frank, the way I read your last messege is you don't advise laying all the cash he has out front, which is good advise. But, he may have funds available to do everything mentioned and still have cash available for the incidentals that we all know will be there. I hope this is the case.

DanG · October 16, 2003, 08:35:41 PM

Since he hasn't said how much capital he has, let's assume he ain't got enough to do the whole thing at once. After all, if he had enough to finance a full-fledged logging/lumber business, he could just retire and not worry about it. :D
With this assumption being assumed, he has to determine what equipment to buy first, and let that equipment buy the rest of it. For this, you gotta pick a starting point. Examine your own personal assets...your talents...and pick a part of the industry that fits you. If you have a lot of mechanical skills, and a good bit of brawn, you are probably suited to doing some "urban logging," and sawing large amounts of lumber for ties, pallets, etc, and make out ok. If you lean more to the perfectionist, or "craftsman/artisan type, you might consider the "value added" end of the business. That, to me, means getting a planer/moulder and doing custom work, or searching out specialty woods and enhancing their value in some way. These are just a couple of examples to get my point across. You gotta make your business fit your capabilities. Not everyone is suited to logging, nor is everyone suited to building fine furniture. You have to examine yourself closely to know your strong/weak points, and try to go with your strengths.

beenthere · October 16, 2003, 09:39:13 PM

DanG, very well said by DanG.

Initially, I thought this was a business plan for the father, or to at least include the father, who apparently is now in early retirement. DanG's comments could well apply to the father too. Their collective interest and excitement along with the aptitude for turning logs into lumber, or turning lumber into a product will go a long way to making their business venture profitable. Turning urban logs into lumber is a comendable and possibly rewarding endeavor, but not likely that it is a profitable venture (unless their is some outside 'funding' available such as Gov't support). Just an opinion.

trey_w · October 16, 2003, 10:27:50 PM

I definately don't have enough to pay for everything, but I may be able to pay for one or two of the large expenses. Such as land and building, or machinery. This will be a plan for my dad and I and might include my brother. We were all in the telecom business and I'm the only one that's survived in it. My brother has a job but doesn't know how much longer it will last. I plan on taking this slow, keeping my job and letting my dad do what I can't because of work.

DanG, you're right, I'm still struggling with a starting point. I am a bit of a perfectionist and I probably need to go the way that generates the most income for my dad to start with. I plan on doing this in the Dallas area which also bothers me from reading some of these posts. How big a business could I build when there aren't many trees, at least not as many as northeast texas. ( Been reading Joey Lowe's bio ;D ) Although according to Harvesting Urban Timber, supposedly there is enough thrown away that if it was all used we wouldn't need to cut down forests. (Don't know how true that is)

I called a Wood-Mizer dealership in CA. and talked to them today. VERY nice lady on the phone who listened to my story and invited me out to play. The probem is that it's a 2 hour drive from where I'm working and they are only open from 8 to 5, which happens to be the same hours I'm working. But I'm going to try to sneak out for half a day. ;)

DanG · October 16, 2003, 11:40:58 PM

I disagree on two points. 1: IF you're in the right place, there is enough urban timber to keep you busy. Hauling it home, then marketing the product are the big problems. 2: There ain't no way urban timber can replace all the woodland timber that is logged.

Trey, you have landed right in the middle of a bunch of Telecom refugees. Kevin and I are still active, and several other guys on the forum are retired from the biz.

Why don't you call Woodmizer's 800 number and locate some sawyers near you? Other manufacturers offer the same service, too. It would afford you a chance to see the equipment working in a real-life situation.

Ron Wenrich · October 17, 2003, 04:05:04 AM

Before you jump on this urban timber bandwagon, there are some downsides to the quality of urban timber. Drive around and see what types of trees are growing. They aren't the same ones that sawmills use to produce the kind of lumber you find at the local outlets.

In my area, maple is usually Norway maple, oak is pin oak, elm is chinese elm, etc. These don't look like many of the north American native hardwoods. Sometimes the growth pattern is such that the grain isn't all that nice. Then there's the trash metal factor.

Just how much is "thrown out" in the Dallas area? That has to be part of your business plan, especially if it is your log source. What other alternatives are there? Is anyone else using the material? Why or why not?

No way will urban timber provide enough lumber for our usage. We currently import lumber, since we can't harvest enough of our own.

Land and buildings can be rented. That's a huge chunk of change to put down and may better be diverted to somewhere else.

Sawmills are resource and market driven. No resource, no sawing. No market, no sawing. You have to satisfy both ends.

Mike_P. · October 17, 2003, 05:57:31 AM

Trey:

I wanted to add my two cents regarding your new venture.

When you do your business plan, it should include a detailed budget, and you should clearly understand where your breakeven will be.

And, things always take longer to accomplish than you think they will initially. At least that's the case in my projects!

If you really want to do something, in addition to the good planning and hard work, it is the dogged determination to keep going that will make it a success.

Best Wishes.

Mike P.

Minnesota_boy · October 17, 2003, 06:36:19 AM

When I bought my Woodmizer in 1996, I planned to buy timber from small woodlots, cut and skid it to the mill, saw out the lumber and sell it. It didn't take long to figure out that if I'm felling, I'm not skidding and that equipment sits idle. I can't saw when I'm skidding, so there is more equipment sitting idle. Then I discovered that I really hate the selling part and the associated paperwork required for taxes.

Then I discovered how much demand there is for a portable mill doing custom sawing as all of the older mills sitting around are doing just that, sitting around because of the costs associated in hiring a crew and paying for workmans compensation, unemployment, social security, medicare, etc.

I now just do custom sawing at the customer's site and word-of-mouth is my only advertising as I can't keep up to the demand most of the time. I have developed a few regular customers that have me in once or twice a year and a bunch more that call me on an irregular basis, but most are a one time to help with clean-up of storm damage or thinning their woodlot or want some custom cuts that are not available from conventional sources.

To make the business work, I have kept the equipment costs fairly low, buying an older 4x4 truck and other used equipment that is still serviceable, with the major investment being the new woodmizer. I'm still trying to figure out how to deal with the changing seasons here where the temerature range is from 95 to -40. I do not saw every day as I have trouble with scheduling, and sometimes I like a little gap for a day off or maintenance on equipment that I prefer to do at home where i have more shop equipment. It also helps that my wife works so we have stable income too. ;D

SawInIt CA · October 17, 2003, 10:20:44 AM

Trey,

I am not sure where you are going to be in CA. We are in between Sacramento CA and Reno NV right off I 80. You are welcome to stop by and take our equipment for a test run. LT 40 Super, forlift, JD 310E Backhoe, Dozer and a HUGE Stack of Douglas-Fir, Incense Cedar, Sugar Pine, Ponderosa Pine, Maple and Oak. There is a caomapny that has a contract with the city of Sacramernto to supply them with a small yard and they take ALL the trees. no cash exchange but they take the good the bad and the ugly. You might check with Dallas.

DanG · October 17, 2003, 10:07:04 PM

The urban log situation seems to be different everywhere you go, and I can only say how it is here. Tallahassee is a city that is in love with it's trees, and there are a lot of them. Most of the city's land area has been developed within the last 20-30 years. Before that, most of it was either commercial or private woodland, hence they are the same trees you would have bought from a logger. But now they are being taken down a few at a time by arborists who aren't interested in trying to market logs, or by land clearing firms that just want them gone. Every day, I see enough logs on their way to the dump or the tub grinder, to keep my mill busy for a week. The guy that has the grinder does sort out a few choice logs, after the arborist has PAID him to let him dump them. This guy even has a "stump shaker" to get the dirt out of the stump, then he sells the dirt. ???
Another guy, north of town, has a Woodmizer and a big firewood processor. I'm not sure what kind of deal he has for getting logs, but he takes the whole mess and either saws, chips, or splits all of it.
Most everything on the east side of town goes to the county landfill. :-/ It's a shame to see so much wasted, but I get about all I can handle from friends, and friends of friends, and relatives of friends, and friends of relatives.

On the other hand, my Cousin's husband, who works at a huge mill in Valdosta, Ga., says their mill buys most all of the urban timber in their area. He says they have so many scanners through-out their process, that metal isn't a problem. Unfortunately, he is on sabbatical in Bagdad right now, so I can't pick his brain any more for a while.

trey_w · October 18, 2003, 05:27:44 PM

Thanks for the invite Sawinit, I'm in Walnut Creek so that would be a bit of a drive. If I can get a slack day I may head that way anyway.

I have a firewood question, is it sold green? or dried? Not that there's a HUGE call for firewood in Dallas but I was just wondering.

C_Miller · October 18, 2003, 06:38:55 PM

My guess is that Dallas would want it's firewood kiln dried and packaged neatly with little bundles of kindling on the side.

That cruise strip still goin' in Walnut Creek?

C

Ron Wenrich · October 18, 2003, 07:46:25 PM

Firewood could be an interesting sideline. Its normally sold dry. But, you might want to consider bundling it up.

In Dallas, people probably don't want to have a bunch of firewood in their backyard. But, they would like to have enough to set off a fire every once in awhile. Campgrounds are another avenue.

They sell 1 cu ft bundles for about $3.50 around these parts. That's retail at the local convenience store. They even sell some of that stuff, even though you can get a pickup truck load of $50.

If you can sell it for $1.50-$2.00/bundle, you could make a pretty good profit.