Share your story of success and failure in business

[nstringer04]

Since starting my own small sawmill business only 1 year ago, I have had numerous ups and downs. I have been overwhelmed with happiness and optimism as well as fear and uncertainty. One thing that seems to help me get through the hard times is to hear stories of how other people haved handled troubling times within their own business. What happened? How did you overcome? How did you fail? Share your story.

[WV Sawmiller]

NST,

    Welcome. This should be an interesting thread. I think we'd all love to hear from you about your personal experiences too so we can respond about how others handled the same or similar situations. What is your target clientele? Are you portable or stationary? What kind of support equipment to you use or find you are short on? What prompted you to become a sawmiller anyway?

    Looking forward to seeing how this turns out.

[4x4American]

Subscribed.

[Magicman]

I did not really have a failure, but I certainly did have a change in direction.  My plan was to harvest my own trees, saw, and sell lumber.

The harvesting took away valuable sawing time and when it was wet, the harvesting stopped.

Next was inventory.  I had no idea what buyers might want so I sawed an assortment of 1" Oak and SYP framing lumber.  Then if I did not have what they wanted I either sawed what they wanted, or sold them what I had and sometimes taking a hit on length and width. 

Then it was storage.  I had no sheds to store and keep my inventory dry, so I was potentially loosing my inventory.

After about 6 months, I had started picking up custom sawing jobs and then I finally realized that I was on the wrong end of the lumber.  There would be no more selling for me.  No harvest, no inventory, nor storage. 

I would offer portable custom sawing only.  No logs, slabs, or sawdust to get rid of.  I have never ever regretted making that change in my business plan, and I am well into my 13th year of sawing.

[4x4American]

I would love to make a go of your gig, MM, but I just don't have the clients lined up for that.  To keep busy I have found that I need to be flexible.  I keep a small inventory of framing lumber and 1" stuff.  All EWP.  That is what people always seem to ask.  Oh, you have a portable mill, how much for a 2x4x8'?  Have any off hand...If I don't have it I will attain the logs and saw it out.  I try to keep logs offhand but I don't have much room to work with here.  Then there are the portable jobs.  I like to travel, but every so often you get one that is too muddy or too steep or the logs are good for nothing rotten twisted things covered in mud with rocks embedded into them.  Even after you explain why you need clean logs over the phone two weeks before...

[Verticaltrx]

What you are feeling is the norm for entrepreneurs, there will be some ups and downs in any business. I can't speak on the business of sawing in particular, (although I do use my mill in my current business) but many service businesses are similar so hopefully I can give some insight.

I started my first business when I was a junior in high school which was around '00-01. I noticed in our area there was a need for someone to remove Hawthorne trees from pasture land. They are little crab apple like trees with huge thorns and neither bush hogging (flat tractor tires) or dozing (loss of topsoil) was an option farmers seemed to like. So I built an attachment for the front of a loader tractor using scrap steel and a $60 hydraulic cylinder and I had a tree/post puller. I started out with a borrowed tractor and my attachment until I could afford an old Ford NAA which I then mounted the attachment on the 3pt hitch. It was somewhat tedious work, but I was turn a $10/hr profit and for a high school kid that seemed pretty good back then. 

Moved on and went to college also got my Class C contractors license which was about '07. Started doing small farm handyman type work on the side (after class, on weekends, etc). Picked up some jobs doing fencing and building small sheds, barn repair, etc. Started doing all my fence jobs with that old Ford NAA and a 35yr old PTO post hole digger on the back, setting the posts all by hand. Time went on, I upgraded equipment along the way, got my class B contractors license and started taking on larger and larger projects

Fast forward to today, I mostly build barns, sheds and portable buildings and I'm continuing to grow my business. This year I hope to hire some full-time employees to keep up with demand.

I've had my tough times, from dealing with irrational customers, to bidding jobs wrong (and basically working for free), to dealing with broken equipment, to going months without work in the winter. The more problems you face the easier they become in the future, you learn something from each one.  But, there is far more good than bad usually and the freedom and income potential is definitely a high point of being an entrepreneur.



A few tips:

-stay out of debt, not having any payments on anything makes it much easier to float along when no work is coming in, keep a little savings built up too. If your business is seasonal save up enough during the productive months to make it through the winter.

-Advertising/networking/branding is almost as important as production. (This took me a long time to figure out). You'll hear lots of folks say that word of mouth is all the advertising they need but if you really want to grow your business and increase your earning potential by a lot, you need to advertise. Advertising can be anything from yard signs to truck/trailer graphics, to craigslist ads to newspaper or radio ads. A good, professional, website is also a plus.

-The customer is not always right. 95% of the time they are right, ie you do what it takes to make them happy, but there are some that just need to be culled from your client list. Good advertising will allow you to bring in enough business to add to the top/good paying/easy to deal with customers, and get rid of the bad ones.

-If you keep your expenses low it will be easy to turn a good profit. When buying tools and equipment only buy as big as you need and wait until you absolutely can't get by without it before buying. Also really pencil things out to make sure what you are buying will indeed have a good return on investment, the quicker the payback the better.

-Read, read, read.... I try to read at least a couple non-fiction books a month. There are so many good books about business, money, entrepreneurship, and various trades. Good books about these subjects are both inspiring and informational. If you don't have time for reading most are available as books on tape now.

-Get good mentors, I have learned volumes in many different trades and aspects of business just by working along side folks for a while.

Hope some of this helps. 

[Magicman]

Oh, I get calls every week from folks wanting various lumber, Oak trailer decking, Cypress, or ERC.  There is a lumber market here for someone, just not me.

[nstringer04]

I grew up in a "logging family" my grandpa, dad, uncles, cousins, all logged, milled, cruised timber, etc.. I have been logging since I was about 15. It's just in my blood. I always liked the idea of owning a mill and finally got a woodmizer last year. I mill crane mat timbers and pallet cants. My only support equipment is a knuckleboom loader.
      Lately the mat business has come to a screeching halt and pallet cants don't really pay the bills. Still logging to do that.  I have known all along that I needed to find as many markets as possible so I could have a back up plan but pallet cants is as far as I have gotten so far. I can't build pallets because I don't have the equipment or money needed to start that up yet. Can't afford to sit on lumber either. Hardwood logs are becoming scarce around here also. I would love to find a market for rough green pine that pays enough to pursue. Just seems like I have hit a dead end until things change for the better.
   

[nstringer04]

Thanks vertical. I have a couple of mentors, believe in the the power of advertising and branding, and love to read about business. Lots of great advice.

[Peter Drouin]

And I did just the opposite of what Magicman did. :D :D :D :D :D
Now I'm home putting up roof for all the lumber.


  

  

  

  

  

  

  

  

  

  

  

  

  

 
Sometimes I think I have to much sawdust in my head. :D :D :D

[YellowHammer]

Great pictures of your very successful operation Peter 8)

[Magicman]

I would love to find a market for rough green pine that pays enough to pursue.

Notice that I did not list Pine.

[nstringer04]

I would love to find a market for rough green pine that pays enough to pursue.

Notice that I did not list Pine.

I was thinking more like milling cants or timbers for larger mills to further process. I have found a couple of outlets but they are just a little it too far away

[Magicman]

Yup, a very limited market and transportation would be a killer there.  As I mentioned, there is a Cypress market.

[SawyerBrown]

-Advertising/networking/branding is almost as important as production. (This took me a long time to figure out). You'll hear lots of folks say that word of mouth is all the advertising they need but if you really want to grow your business and increase your earning potential by a lot, you need to advertise. Advertising can be anything from yard signs to truck/trailer graphics, to craigslist ads to newspaper or radio ads. A good, professional, website is also a plus.

I agree with everything Vert says, but in my experience this recommendation is backwards.  A good, professional website is the FIRST thing you should have, and then if you have "advertising budget" left, do the other things.  For probably better than 75% of my custom sawmill work, I have people calling me from 100-150 miles away, because they found my website on the internet ... and they didn't find anybody else!  You can also use "social media" absolutely free, get in there and promote wherever it is you decide to go.

I can't really give you any other advice ... different area, different product (we have mostly hardwoods here), and I'm not doing it to feed a family (this is just a little "fun money" to allow us to take a couple of nice vacations a year).  But I do wish you the best of luck!

[longtime lurker]

A sawmill is a business and regardless of where and what you saw some fundamentals apply because they apply to any business:

It's never going to be smooth sailing. Theres always ups and downs, times of profit and times of loss. Doesn't matter how big you get thats always going to be there - the only thing that might change is the number of zeros involved.

Niches are good while they stay niches. But mostly as soon as you find a profitable niche someone else sees you making money and jumps on the bandwagon. Don't let that stop you looking for niches or servicing them. But dont let finding a niche blind you to other opportunities either.

Never sell a piece of timber you wouldn't use yourself. And deliver on time. Even better - allow extra time for stated delivery and then deliver early. Happy customers are repeat customers.

Make sure you get paid. And make sure you stay on top of the paperwork in general. I hate that part - but I know that if I don't "waste" time in the office then the whole show grinds to a halt.

Sawing matters. You can't make money if you don't saw. But selling matters more. The key to any business is to keep cash rolling in, and in this business that means selling timber. Low paying jobs are better then no paying jobs.

Don't be afraid of debt. It's just about impossible to shift from a subsistence business to a profitable one without taking on debt. But know good debt from bad debt. Good debt is borrowing money to buy things that make you money. Use debt to finance equipment. Cash is something you should save for buying logs - or for meeting repayments during the inevitable quiet times.

Know your cost of production. And know when you can buy something in cheaper then you can do it yourself. The aim of business is profit and believe me - some of the most profitable lumber sales I've ever done were simply a matter of picking up a phone and buying stuff from a bigger mill further away and marking it up as it passed through my yard.

The easiest way to make a million dollars with a sawmill is to start with two million.

[DMcCoy]

I agree with verticaltrx, that is good advice.  Stay out of debt.  Don't buy stuff you do not need, and make sure it is need not want.  Tools and equipment decline in value over time to a base level, that is your loss.
I would add having a pile of cash( edit: in the bank -duh!) will keep your head clear for making good decisions and your options open.
As MM stated in a less direct manner - being aware - really important. 
I equate being in business as getting rid of 1 boss and getting 300.  You supply what they want.
Like to work - Being self employed is great because you only have to work 1/2 days! 
That would be the first half or the second half. :laugh:

[thurlow]

I would love to find a market for rough green pine that pays enough to pursue.

Notice that I did not list Pine.

How 'bout yure sweetgum?

[downsouth]

I also just started my sawing buisness. My plan is to do portable custom sawing. Of course that may or may not change we shall see. But I have a 40hour a week job and I do not need this as income,just as funny money. That does not mean that I do not want to be successful. I just want to start slow. I own my mill and have no buisness debt.
    This is my third buisness that I have started. My first was a roofing company,that was very profitable for a few years. I think it grew way too fast,as I could not keep up. My employees were not trustworthy. I made a living off of this for a few years and after a year long migraine I closed up shop.
  My second was a trucking company. I started it because a friend of mine (life long friend) had been in the dirt hauling buisness for years. He got a divorce,lost everything he had. So we decided to buy a truck. I would buy the truck,cover the paperwork and finances and he would drive it and hustle work. It worked great! For about a year and a half. Then someone offered him a job making $100 more than the salary I was paying him and he quit.
I had no use for a dump truck,as I worked a full time job. So I sold it.
This sawmill buisness I will rely on nobody but myself. I will take it slow. I have learned how to say no to people. You can't make everyone happy all the time and if you try you will probably pith off more people than you need to.

[Magicman]

I seldom if ever say "no" to normal sawing jobs.  If I am booked tight I tell them so, and that it could be 2-3 months (or whatever time) before I can get to them.  If they can not wait I understand if they need to contact another sawyer.  Most times they can wait, and most times I can work them in sooner.

I lost a nice one this year while I was busy sawing for another customer.  It was 60+ miles away and he found someone else within a couple of miles.  Only thing was that he had to load and haul them where I would have brought the sawmill to him. 

The point being that you can not get them all.  There are bulls and bears in the business world, but no hogs.

[customsawyer]

One of the the "old sayings" that I live by is pigs get fatter and hogs get slaughtered.

[red oaks lumber]

one thing i would like to point out is your decision making is completly differant when your sole income is your business not as a hobby myself my business is my life so, turning a job down because your busy or whatever is not an option. there's 24 hrs in a day,ya learn real quick that more hours are spent working than not if you want to suceed with your business know saturday and sunday are also work days.
i believe there are "hogs" in business, and i'm one of them you don't get ahead without a big appetite .

[POSTON WIDEHEAD]

One of the the "old sayings" that I live by is pigs get fatter and hogs get slaughtered.

Never heard this but I like it! 

[tmarch]

"There are bulls and bears in the business world, but no hogs."  But we do have goats. :D

[4x4American]

And if you gonna be a bear, be a grizzly!