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what to charge??

Started by JamieT, February 21, 2014, 10:55:02 AM

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JamieT

Got my mill set up and cutting! Will post pics soon. Now I have several people asking for different cuts and I have no idea what to charge them. Im not lookin to get rich  but dont wanna cheat myself either. Im cutting cedar, pine, and oak. Any help??
Learned just about everything I know, from the greatest man ive ever known. My father! Everything else was self taught thru the school of HARD KNOCKS ;-)

Gasawyer

Jamie glad your up and sawing! A lot of the costs depends on what you are sawing. When I first started softwood was $0.15 and hardwood was $0.25 a board foot. Large beams,posts,and slabs are by the hour. As you work the mill you will get a feel for the cost of operation and what your time is worth. Good luck and happy sawing!
Woodmizer LT-40hdd super hyd.,Lucas 618,Lucas 823dsm,Alaskian chainsaw mill 6',many chainsaws large and small,NH L555 skidsteer, Int. TD-9,JD500 backhoe, and International grapple truck.

JamieT

I have a ton of cedar to cut up. Just got a black walnut as well! Im so excited !
Learned just about everything I know, from the greatest man ive ever known. My father! Everything else was self taught thru the school of HARD KNOCKS ;-)

dboyt

Jamie, congratulations on the mill.  I'd suggest you tell people that you want to mill for yourself until you get a feel for the sawmill before you start cutting for them.  What do you mean by "different cuts"?  You cannot afford to quarter saw oak at the same price per bd ft as flat sawn and, as Gassawyer points out, hardwoods and softwoods cut differently.  Have you set up as a sole proprietorship?  You will need to report your income for tax purposes.  Unless you are just hurting for work, I'd suggest $.30/ bd ft for hardwoods and $.25/ bd ft for softwoods, if the customer supplies the logs.  Trust me, you won't get rich at that rate.  Sounds like you're off to a good start with that cedar & walnut!
Norwood MX34 Pro portable sawmill, 8N Ford, Lewis Winch

Cedarman

Cedar , you might want to be more toward $.40 to $.50 per board foot or do them by the hour.
I am in the pink when sawing cedar.

Kingcha

I am in the same boat, what to charge.   I have decided to charge by the hour and have the customer help if they are looking to keep the cost down.   I won't have the mill going by late April early May but hopefully I will be able to get the word out and get some business.   Because I am new I will start out with a lower rate go from there.   I am thinking $30-35 per hour to start, does that seem fair?

Matt
a Wood-mizer LT15 10hp Electric, 45hp Kioti tractor, electric smoker, wood-fired brick oven & yes a custom built Solar Kiln

jmouton

           we charge  65 and hour plus travel  fee's if they apply  , and we get plenty of work , I wouldnt start out  with a loball price  ,  I would pick a price that you can make money at and go with it 


                                                                             jim
lt-40 wide ,,bobcat,sterling tandem flatbed log truck,10 ton trailer, stihl 075,041,029,066,and a 2017 f-350,oh and an edger

Cedarman

Just a wild thought.  Do the first couple hundred feet for free or a whole small job for free.  Thought being, you will be slow and trying different things, second, you might mess up a board or two.  Let the customer know why he gets such a great deal.  If this is a silly idea, shoot it down, but with good reasons please.

If you have done a good bit of sawing for yourself , then this idea might not be so good because you already have enough experience to provide value for your time spent sawing.
I am in the pink when sawing cedar.

Kingcha

I did forget to mention that I have a manual lt15 and its not mobile.   They will have to bring the logs go me.  I have really not done to much production as the trees I am sawing are on the small size  10-14".     Not sure how many board feet an hour I can do.   Even at 100 bf an hour that's .35 a foot.    There is no way I could even try to compete against the bigger mobile mills.  Once I get a feel for it I would hope I could get at least $45 an hour.

Matt
a Wood-mizer LT15 10hp Electric, 45hp Kioti tractor, electric smoker, wood-fired brick oven & yes a custom built Solar Kiln

POSTON WIDEHEAD

Jamie, I didn't charge by the hour for a full year.
Now I saw Cedar at $50.00 an hour.
I charge .25 for soft and .30 for hard.

Charge by the BF at first and go slow while you learn......yes, it maybe time consuming at first but what you learn and the comfortable speed you learn to work at will pay off the rest of your career in milling.
Good-Luck Buddy!  :)
The older I get I wish my body could Re-Gen.

Finn1903

Congratulations on getting your mill set up.
Are you supplying the logs or are people bringing them to you?
I encourage you to charge what you think if fair and that covers your cost including insurance, taxes, paying for the mill (even if you don't have a mill payment the money came from somewhere like a savings account), blades, maintenance, your time and your support tools and equipment. 
For the logs people bring to me, I charge $65 per hour.   I second what dboyt said, cut for yourself first then start cutting others logs, or you can charge by the bf and go slow, either way your learning.  I'm still learning.
WM LT40HDD47, bunch of saws, tractor, backhoe, and a loving wife.

ET

JamieT; congrats on your new venture. Ive been sawing for customers now for 2 years. I am currently charging .35 for both hard and soft when they bring their logs to me. I charge .50 when I travel and I do charge mileage one way over 20 miles (.50 mi). I charge $50.00 hr for all labor not associated with sawing. I believe what Ive seen on other sawyer websites that I am undercharging but also need a few more years to expect premium rates.

Your excitement about sawing is great. Its addicting hard work! You wont regret your decision, take your time, and do good work.  My 2 cents. Be safe.
Lucas 1030, Slabber attachment, Husky 550XP, Ford 555B hoe, Blaze King Ultra, Vermeer chipper, 70 acres with 40 acres Woods.

JamieT

Thanks fellas. Im leaning towards the idea of cutting for myself for a little bit. I currently have about 35 cedar boards at 1x4,1x6 at 10-12 ft long and im very satisfied with the cuts! Someone mentioned it being hard work  retrieving logs, loading and unloading trailers on a,tractor all day is work. I could run that little mill all day long and still wanna go!! The smell, the sawdust flying, I can push and flip all day lol

Back to business, I was thinking of .25-.35 if I decide to cut. What I didn't think of is supplying logs  I luckily have access to as much as I want of pine, cedar, walnut, and different oaks. So logs are no problem for me  its the work mentioned above lol. So, with that being said would .50-.60 be to much? Im not sure how I could charge by the hour . Thanks again for the welcome!
Learned just about everything I know, from the greatest man ive ever known. My father! Everything else was self taught thru the school of HARD KNOCKS ;-)

drobertson

Howdy jamiet, and as much as I hesitate to say anything on what to charge, I will anyway.  And it is this, most mills average at the end of the day about 250/thousand bdft.  Keep in mind this is with a crew and overhead.  So, as it has been the case with me, this base is a pretty good starting point, and can be adjusted as needed one side for you or the other way.   250/thousand is a good medium, and should be sound starting point.     david
only have a few chain saws I'm not suppose to use, but will at times, one dog Dolly, pretty good dog, just not sure what for yet,  working on getting the gardening back in order, and kinda thinking on maybe a small bbq bizz,  thinking about it,

YellowHammer

When I first started breaking into the business I found out what my competition charged, averaged it all out, then went just a tad cheaper.  I used the first several jobs as learning experiences, and that they were!  I learned how much Bdft I could saw in a day, how much of the day I could saw, what my expenses were, how many blades I was going to use, and especially how much time I wasted doing everything BUT sawing. ;D  I also learned that sawing for myself was a lot different than sawing for someone else.  I could screw up my stuff and nobody cared, but screw up a customers log, boards, or yield and you'll definately head about it. 
I never sawed with customers around because I knew I would inadvertently make mistakes, knew I wanted to go slow, and knew I didn't want anybody leaning over my shoulder.  I also learned how to take an ugly log and turn it into nice lumber.  I could take my time doing it, and I did.  To me production isn't as important as quality, although certainly in a business I had to learn how to maximize both.
After a few of these types of jobs I ran the numbers to find out what I really should have been charging, and then adjusted my price accordingly, and it went up significantly.

Something else I learned is that people will pay more if they believe they will get excellent service and excellent product, however people won't pay anything for poor service and nasty product.
Good Luck
YH 
YellowHammerisms:

Take steps to save steps.

If it won't roll, its not a log; it's still a tree.  Sawmills cut logs, not trees.

Kiln drying wood: When the cookies are burned, they're burned, and you can't fix them.

Sawing is fun for the first couple million boards.

Be smarter than the sawdust

customsawyer

Be sure to charge enough for your logs. The price of logs especially hardwoods have gone up in the last 6 months. 
Two LT70s, Nyle L200 kiln, 4 head Pinheiro planer, 30" double surface Cantek planer, Lucas dedicated slabber, Slabmizer, and enough rolling stock and chainsaws to keep it all running.
www.thecustomsawyer.com

SquareG

I'm with robertson, .25 is normal here.  One sawmill after another will custom cut for .25.

Brucer

I did the opposite of Yellowhammer. I found out what my competitor charged and went a little higher. I'm still in business. He isn't. Mind you, I also made sure my quality was top notch, and I never tried to tell a customer what he (the customer) needed. That also set me apart from the competition.

Competing on price is a race to the bottom.

If you're supplying the logs, be sure to charge enough for them. I know one guy who charged much lower than I did because his logs were "free". He wasn't pulling any business away from me because he was too far away. I suggested he ought to charge more but he didn't want to "cheat" his customers.

Funny thing -- he sold so much wood that he ran out of "free" logs. Once he started buying them he had to increase his prices substantially. That's when his customers started to think he was cheating them.

I have a standard price list for all the different sizes I saw. For big timbers that require bigger logs, the price per BF is higher. Customers often have no idea what a timber is "worth", so they are leery about getting taken. My price list reassures them. About once a year someone will suggest that he/she knows another sawyer that charges less. I always encourage them to buy from the "other guy" if they want the lowest price. I get a lot of business that way  ;D.
Bruce    LT40HDG28 bandsaw
"Complex problems have simple, easy to understand wrong answers."

Cedarman

I am totally with Brucer on pricing.  There have been 4 or 5 cedar mills that have started up and went by the wayside over the years.  Several explicitly said they were going to put me out of business because I charged too much.  There was only one mill that stayed in business.  They charged more than I did, but had a different customer base. We competed for logs, but not for customers.
I am in the pink when sawing cedar.

dboyt

If you're supplying the logs, that's a whole 'nother deal.  At that point, you are selling lumber, and not the service.  Either find out going rates for the various species and charge per board foot accordingly, or charge the customer for the log and milling service separately.  Then you have to get your accounting straight, because goods (lumber) is taxed differently than labor (milling).

I was a bit embarrassed by what I charged at first, but trying to under cut other mills will put you out of business quickly, especially when there are folks around who just want a little extra money or something to do in their retirement.
Norwood MX34 Pro portable sawmill, 8N Ford, Lewis Winch

YellowHammer

JamieT,
The strategy I'm talking about is for sawing only, for a new inexperienced Sawyer, with customers bringing their own logs.  That's how I landed my first jobs when I was as green as grass, and used these "learning experience" jobs to learn the ropes.  For example, that's when I learned I would not saw oak 16 foot 8x8's any more, unless they threw in a bonus to cover my medical expenses.

Using this "scouting" experience I was able to amass enough information to work up a business analysis with real life data to put some meat on the bones of my pricing rates.  Then I raised my prices to match what the data indicated.

I didn't have to worry about losing customers with the higher prices because by then I knew exactly what I had to charge to make a profit, so if a customer wouldn't pay my fee, then I was going to lose money on the job anyway, so would refuse it.

My rates now are at almost twice the regular market, and I still have a a steady stream of customers bringing logs for saw jobs.  I refer folks who don't want to pay my rates to other competent local sawyers in the area, because I have arrangements with them to pay me a percentage commission on each job I send their way.  Either way I make money and the customer wins. 

The best piece of advice I can give is to take notes and accurately track your expenses and income, and run the numbers.  Then you can come up with your own price based on your particular business characteristics. As many of these posters have said, there is a fine line between making money and losing money.

YH

YellowHammerisms:

Take steps to save steps.

If it won't roll, its not a log; it's still a tree.  Sawmills cut logs, not trees.

Kiln drying wood: When the cookies are burned, they're burned, and you can't fix them.

Sawing is fun for the first couple million boards.

Be smarter than the sawdust

JamieT

All these replies are logical. I thank you all for your input. These jobs will be side jobs. For starters, im way to "New" and my mill is WAY to small for production lol.I figure on taking a job here and there to pay for the mill, and any expense I incur while building my projects. Not total coverage  but anything helps. Right now I have a bunch of big cedar logs available. Some of it is to big for my mill to handle!! Most of what im dealing with is in the 15-25 inches wide. And im cutting them 16.5 inches long. The bigger stuff is taken to my buddy with the timber king, we have a deal goin. ;-)  im leaning towards about 1$ a bf upto10 inches wide. Anything over 10 is 1.35$ some will say its to much, some will say its cheap. Thanks again for all the input. Sorry its taken so long to get back, bet most of you can guess what ive been doin ;-)
Learned just about everything I know, from the greatest man ive ever known. My father! Everything else was self taught thru the school of HARD KNOCKS ;-)

JamieT

Sorry for the typos lol. 16.5 feet long... now i know what that "preview" button is for!
Learned just about everything I know, from the greatest man ive ever known. My father! Everything else was self taught thru the school of HARD KNOCKS ;-)

Cedarman

Jamie, who are we to judge how long you should cut your logs. :D
I am in the pink when sawing cedar.

Dave Shepard

Sounds good to me, a lot easier to pick up those 16.5 inch boards. I always hated handling 16 foot lumber by myself. :D
Wood-Mizer LT40HDD51-WR Wireless, Kubota L48, Honda Rincon 650, TJ208 G-S, and a 60"LogRite!

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