Business advice need...Am I being dumb

[plasticweld]

I already have almost no extra time, a good thing I guess.  I am already a partner in a sawmill, a band mill already selling retail lumber.  My partner the experienced sawyer me the money guy and the guy who sells the lumber and buys the timber and gets it to the mill, everything is going great so I thought I would screw it up by buy a Woodmizer It40  I believe it is a G 24.  It has a 100 hours on it I am going back and forth with the guy over the last $1,000 if wants $11,0000 I offered him $10,000.

I have a job with a lot of Larch I sell the tops as fence posts the next part as hop posts and the larger stuff I send to the mill and saw and sell.  I make good money with everything except the parts of the tree that are from 10 inches to 13 inches, to big to sell as a hop post to small to economically truck and sell my mill so it goes for pulp wood which brings next to nothing.  I have this idea of sawing this part of the tree into poles for pole barns figuring that it is the perfect size for a 6x6 or 8x8.  I figure while I have only worked on the dumb end of the mill many years ago it couldn't be to tough to figure out this process, I have already some orders, they can be filled at the mill. Room is the problem so is sawing longer pieces with the way the mills is set up in the building and the way lumber comes of it, we also lack physical space for more logs and more lumber.

I would like to leave the new band mill in the woods to cut down on trucking costs, create one less item in the yard along with the slab wood which I have only limited markets for.

Paying for the mill is not a problem.
Marketing the material not a problem
Time is an issue everybody who works for me is already putting in long hours

The real question, the one that I need some guidance on is that in-between my needs for this mill I would like to rent it out.  I don't think I have enough of an economic need to justify tying up money if it is not producing a profit, I could use the same money to buy standing timber and yield a healthy return, the only way I figure the mill would really generate a profit is if it makes more profitable to market a part of a tree I am now giving away. brought in money from rental, did not really depreciate much below purchase price and was not destroyed by renting customers.


Anybody ever rent their mill out to people who had no clue what they were doing but wanted to saw lumber.  How easy are these things to wreck?  Does this sound like a dumb idea.  Should I just be content with what I have, seems to be working great and I am making good money not always easy to do in the lumber business.

Thoughts and personal experience appreciated...Bob

[Chuck White]

I would never rent my mill out, unless I had a very substantial security deposit.

Anyone that I would consider renting the mill to would have to prove to me that they had the operation of the mill down pat.

[scsmith42]

I would never rent any of my mills out unless it was to an experienced miller that I trusted. To answer your question, yes they are easy to wreck.

[JustinW_NZ]

Agree with the others, unless it was an operator I had worked with, no way...

Cheers
Justin

[Cedarman]

If you find a guy good enough to rent the mill to, hire him instead.  This way you stay in control.

Also, what size hop poles do you sell and what is the going rate in your area?
Richard

[Ron Wenrich]

When you rent out, the guy doing the renting won't treat the equipment the same as you would.  Better have good insurance in case someone gets hurt or it gets stolen.

If I'm a landowner or the consultant selling you the timber, I'm not allowing you to put that mill on the property.  I've seen where they had put portable mills on the property and the slab pile remained 30 years later.  You may be able to pass this off to some landowners saying that they'll have firewood.  Some might bite, some won't.  But, if I have to clean up the mess, I want more for my stumpage to justify your savings and my expense.  There is also some exposure to liability for the landowner. 

I've also seen small larch sawn into cabin stock.  If you can sell 1x6 larch, you should be able to saw it out of those poles, as well.

[drobertson]

If the price of the mill is within reason, and you can find someone to work the mill, actually work out the details of moving in on folks land, I say go for it,  it could work and it could flop, but you'll never know if you don't try.  With that said, it seems like a very risky move, one that could bite back, in terms of actual profit and the usual  wranglings of dealing with folks.

[justallan1]

I feel renting a mill out may be bad business any way you look at it. Somehow liability comes to mind first and even with contracts someone's going to tie up your time trying. How many folks actually cut more than $4 worth of boards the first day sawing, so you get a bad name because somehow it was your mill that didn't save them $1,000s. If your renter isn't satisfied how your mill is working and starts adjusting things, even with a deposit, do you have the time and knowledge to get it back to usable?
I certainly don't mean it as an insult, but by asking, "How easy are these things to wreck?" tells me that you should run one for a day before making the decision of renting one out to folks that, you have to guess, don't know anything about them.
Just my thoughts.

[Oliver05262]

If you find a guy good enough to rent the mill to, hire him instead.  This way you stay in control.

Wise thinking there............

[Dudaks]

Have you thought about just hiring someone with a portable mill for this?? You are saying you are short of time but want to manage sawing and renting a mill? I think you should see how profitable you could be with subbing this part of your operation out.

[red]

Once I saw a mill advertized for rent it was a high price . . So just hiring a portable Sawyer would be a better Value

[sandsawmill14]

if you buy a 2nd mill hire a 2nd crew  my seond mill is being moved and setup this coming week.

[sealark37]

Never lend, or rent, your saw, your bird dog, or your wife.  Never works out.  Regards, Clark

[Alligator]

Renting a sawmill sounds like Trouble, from legal aspect, from a mechanical aspect, from a security aspect. Get good liberality, theft, and damage insurance, if you can get it.

[WH_Conley]

The only time I have ever rented my mill was to an older gentleman that had retired and sold his LT40 that he ran for years. He decided to add on to his barn. He had the logs and I was working construction full time. I knew him well. That was the only time.

[beenthere]

From the OP (Original Post)

I already have almost no extra time, a good thing I guess.  I am already a partner in a sawmill, a band mill already selling retail lumber.  My partner the experienced sawyer me the money guy and the guy who sells the lumber and buys the timber and gets it to the mill, everything is going great so I thought I would screw it up by buy a Woodmizer It40

Good advice given, IMO.  Don't rent.

But the telling reason also lies in the opening statement...  "me the money guy".   ;D

[jim blodgett]

You initially say you are a partner.  One with clear definition of responsibilities.  You say things are going great, even imply you (and presumably your partner) are making a true go of this business venture.

You then go on to say you're considering buying a piece of equipment to improve profits within your current normal operation, but in the area of expertise of your partner, not yours.

You go into depth using a lot of the pronoun "I", but I don't see a lot of "we"s in your post, which is well thought out.

If I were your partner and read this, I'd be wondering about how committed you are to our partnership.

[woodNthings]

Am i missing something? An LT40 with 100 hrs for $10,000?
I'm with the others, no renting...hire it out at least till the market is established.
A sawmill is really pointless without a good sawyer  ;)

[red]

I bought a race car then found out I was not a race car driver just an Owner

[plasticweld]

If you find a guy good enough to rent the mill to, hire him instead.  This way you stay in control.

Also, what size hop poles do you sell and what is the going rate in your area?
Richard

I do 22 foot 5 inch small end 10 big end $32 delivered I normally get about a 100 on  a load  I charge a deliver fee for under 75 poles

[plasticweld]

I did end up getting the mill, he accepted my offer so I already had one of my guys drop off the money.  It I a 2000 Lt 40 with a sharpening rig and all the spare blades manuals and videos. Yes I did pay just $10,000 I will buy anything if I can buy it right and from my research I can always sell at a profit. Not any different than buying a wood lot in my eyes.

Jim you bring up a good point about me using the word "I"  My partner is a young Amish guy that I treat like a son who has no money for running a business.  He is smart hard working but I do supply all the logs and sell the lumber, Being Amish limits his ability to market lumber.  Levi and I have been partners for three years each year doubling what we do, we are both making money so my guess is that it will be a long term relationship.  I do everything I can to make sure he is making money and he does the best he can to take care of me, our relationship is more than just business this far into it.


Thanks for the advice about renting guys, like any businessman I seek out good opportunities and try to do whatever I can to make a buck. I am a firm believer in asking advice, I am not shy about failure, figuring in order to hit a home run you have to step up to the plate and swing and anyone who swings with all his might is going to miss a bunch of times.  I do know the surest way to strike out or never get on base is to try something half heartily, or just play it safe and sit on the bench..

Thanks for all the thoughtful replies...Bob

[Cedarman]

Thank You Bob for getting back to me on the poles.  In our area the request is for 4" x 22' with min 6" up to 8" butt.  We get $22.00, but they are a good bit smaller than yours.
Last load had 225 on it and barely got them all on.
I did quote 5" and I think I was at your price.  At lot more wood in a pole with a 5" top.
Good luck with your new mill. 
If you have more work than you can handle, a fellow told me one time to stop doing the least profitable and concentrate on the most profitable.  Made sense to me.