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Hourly Rate

Started by ncsawyer, September 18, 2016, 11:26:53 PM

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ncsawyer

I sawed an 8.5 hour job Saturday.  It was all white oak and we were cutting mostly 2 inch thick, live edge boards so he got my normal $70/hour rate. He's about 60 miles away so I charged a travel/setup fee as well.  The funny thing is, that there is a guy with a Woodmizer about 15 minutes from his place that I see advertising on Craigslist.  He looks like he has an older mill and his add states that he saws for $40/hour. 

My customer had called the other guy several times and left messages, but could never get the guy to call him back. Its hard for me to believe that anybody would run their mill for that cheap.  Sure $40/hour is enough to cover your blade and fuel, but is doesn't leave much for fixed costs or the sawyer. 

But as the customer said, "It's easier to pay somebody $70/hour that will show up and work, than it is to pay somebody $40/hour that won't even call you back"
2015 Wood-Mizer LT40DD35
Woodmaster 718 planer
Ford 445 Skip Loader

Magicman

On several of my road trips this year I have passed very closely to other sawmills and also FF members.  That is one reason that I don't indicate the town or even the direction that I am traveling. 

I agree, it's not the cost.  Not taking advantage of advertising, not returning calls, and poor quality sawing has left many sawmills idle.
Knothole Sawmill, LLC     '98 Wood-Mizer LT40SuperHydraulic   WM Million BF Club Member   WM Pro Sawyer Network

It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

thecfarm

Might be so busy at $40 an hour,he has all the business he wants.
I do not saw for others,but I know I would not do it for $40 an hour.
I get talking to my FIL about charging a certain price. As tell him,I can stay home and dig rocks and make more money than that. His come back is,No money in digging rocks. So I say,Starting to understand now,ain't ya?  ;)
Model 6020-20hp Manual Thomas bandsaw,TC40A 4wd 40 hp New Holland tractor, 450 Norse Winch, Heatmor 400 OWB,YCC 1978-79

47sawdust

It also depends on what type of mill you run.With my Lt30 non-hydraulic I wouldn't think  of charging $70 an hour.In Vermont the portable market is flooded.I just stay home and saw for my own construction business and odd ball stuff that my friends and neighbors bring.We have lots of oddballs in Vermont,maybe you've noticed.
Mick
1997 WM Lt30 1999 WM twin blade edger Kubota L3750 Tajfun winchGood Health Work is my hobby.

killamplanes

I am fortunate with an electric mill its stationary :D. I get a fair amount of calls to cut logs and I just tell them to bring me the logs and that detours 80% of them my only problem is the other 20%. But I never liked custom sawing, I have plenty of my own milling that I can hardly keep up with. But I believe theres money in it if done correctly. Its just not for me even at 70hr. I live in my own world though....
jd440 skidder, western star w/grapple,tk B-20 hyd, electric, stihl660,and 2X661. and other support Equipment, pallet manufacturing line

Sandtown Sawmil

I have an LT28 woodmizer. What would be a fair price to charge by the hour in my neck of the woods? I sure dont want to over chage customers but then I don't want go broke either.

4x4American

Quote from: Sandtown Sawmil on September 19, 2016, 10:27:43 PM
I have an LT28 woodmizer. What would be a fair price to charge by the hour in my neck of the woods? I sure dont want to over chage customers but then I don't want go broke either.


I think the best way to do it is figure it out what it is you need to get per hour to make it worthwhile to you to do the job.  And then if the customer wants to hire you they will and if they won't they won't.
Boy, back in my day..

Magicman

Your situation is a kinda "catch 22" situation, Sandtown.  I would expect that your log handling would be slower than a full flown hydraulic sawmill so your lumber yield per hour will probably be less.  But then you probably worked harder to produce that lumber which is not the customer's fault.  It is a balancing act so that the customer gets a full measure of value for his $$$.
Knothole Sawmill, LLC     '98 Wood-Mizer LT40SuperHydraulic   WM Million BF Club Member   WM Pro Sawyer Network

It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

4x4American

And MM is right.  There is a guy here local with an LT15, he's a retired timber framer, and mainly uses it for himself.  But when he gets people who ask him to saw for them, he'll do it for $100/hr.  And like he says, the amount of work that it takes to run that sawmill he won't fire it up for a penny less.  If they hire him or not is their choice.  He isn't trying to do it for a living or really even for a business.  And that's perfectly fine.
Boy, back in my day..

Sandtown Sawmil

Thanks for the info! I saw on the side for extra income. I'll just have to set an hourly rate and stick with it! The only problem I see around this area is people not wanting to pay what I ask!

Magicman

There is always the board foot rate.   :P
Knothole Sawmill, LLC     '98 Wood-Mizer LT40SuperHydraulic   WM Million BF Club Member   WM Pro Sawyer Network

It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

Chop Shop

Quote from: Magicman on September 20, 2016, 08:18:41 AM
There is always the board foot rate.   :P

Thats how I roll.   If Im slow its not the customers problem to pay more.  If im fast, I get a raise.

But I have a MD and can lay lumber on the ground fast.   Then take a nice long lunch.

OlJarhead

I started with an LT10 (trailerized and I called it the SM-LT10) and charged $50/hr.  I worked very hard for that and had to have a lot of help.

When I moved to the LT40 Hydraulic I upped my rates to $75/hr local and $85/hr remote (beyond 50 miles) but found most of my work was remote and now only charge $85/hr.

I've met my goal for the year and am happy with the amount of work I get but in all fairness I don't seem to have much competition.  However, on one job I got that was 130 miles away there were two others willing to do the work.  one at $60/hr and one at $100.  I got the job in part because I went to a Forest Owners Field Day and demo'd the mill and in part because of all the information I provided (before getting the job) on milling and drying lumber etc as well as my constant and quick replies to questions etc.  The customer advised that he was happy with my rate and production.

In the end my philosophy is that the market will decide what is a fair price.  Either customers will pay your rates or they won't and you can and should adjust accordingly.  I find that if I am prepared to explain what my board footage rates run vs hourly it helps too as some do quote bf rates out here but I won't work by the board foot.  For one, I've learned that customers don't always have the logs required to produce 300bf/hr even though the mill can do it.  For example, on my last job I did just about 2200bf in just under 8 hours but that was with one log that scaled out at 461 and some logs scaling out at just 50bf and I find it hard to produce good numbers with small logs.  Sure I can rip thro0ugh them if I am milling alone or have a good crew but even 4 50bf logs per hour is still only 200bf/hr....whereas if I have all 200 to 500bf logs I can produce a lot more per hour and my hourly rates are LOWER than anyones bf rate.

In the end it's about who's willing to work hard, communicate, keep the customer happy and be where they say they will when they say they will be there.

I also live by this philosophy:  my customers work hard for their money so I better work harder to earn it from them :)

I also look at what a mechanic costs.  It can cost anywhere from $75 to $125/hr for a mechanic in a decent shop or dealership to work on your car so it isn't like charging in that range is anything different and you do have an expensive mill to pay for and maintain as well as a wage to earn.

Lastly, someone here (maybe MM or Peter Droin) told me once:  you don't want the customers who won't pay your wage or try to get you to reduce it and I agree now 100%!  This is my rate, this is what I charge.  That's it.

Not to say I don't give people a break later though.  For example I charge $40/band for Bi-Metals if I hit nails...on a recent job I hit a nail, change the band and a little later hit a few nails.  I decided to charge them for only one band and they were thrilled (and might have me back now too)....it's a risk but I think worth it at times.  I also do other things if I can, like I cut a big cookie on a recent job off a stump just for fun because it was a short day and I wanted to run the big saw.  I didn't charge extra for it but hadn't milled my min of 4 hours either so it was a wash.

I won't drag my mill for less than 4 hours of work and if it's a long ways away (150miles or more) I won't go for less than 8 hrs.  I charge mileage over 50 (changing to 30 in the new year) one way and I charge 1 hr for delivery and setup.

I don't do this as my only job though (I have a reg full time gig) but I won't do it without earning a decent wage either.  In my mind I need to earn 33% of what the mill earns as a wage, 33% for mill operations/business and 33% for taxes....so to earn at least $25/hr I'd have to charge $75/hr on the job...I charge a little more than that but I'm getting the work at that rate so I'm not complaining ;)

Remember:  your time, your physical effort, your health etc are all part of the cost of doing business.  You have to work hard to mill lumber, you have to provide the equipment and tools, maintain it and drag it behind a truck to the job site etc etc....allot that takes time and money and time is money.  I may only charge for an 8 hour day plus mileage and setup but it might take me 2 hours to get there and 2 hours to get home....that's a 12 hr day which can cut that $85/hr down to a little over $60/hr if you add in setup to the hourly rate.....bear that in mind too.  After all, who's paying for your drive to and from the site?  Maintenance time at home?  Resharp and new blade fees?  Maintenance on the mill?  Insurance n the truck and mill?  etc etc etc
2016 LT40HD26 and Mahindra 5010 W/FEL WM Hundred Thousand BF Club Member

Crossroads

At this point in my milling "career" I haven't felt like I could charge more than $350 1000/ bf or $30 per hr with a $50 set up fee. The big factor for me is my experience or lack of. Until about a year ago, I had never worked or been around a sawmill. So, at this point I'm getting paid for my education. Also, there are several other mills in my area who have more experience and hydraulics that work for $40-50/hr. Working alone with a manual mill, I only cut about 800bf a day, but I'm getting faster with each job and eventually I'll raise my prices.
With the right fulcrum and enough leverage, you can move the world!

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OlJarhead

Understood ;)  At 35c/bf ($350/Mbf) I could make $105 an hour though on Sunday I would have been at $99/hr....so at $85/hr I'm charging less per hour but I have an LT40 Hydraulic and can mill up over 500bf/hr if I have the right logs...usually though I run in the 200 to 300 range and it all depends on the logs and help.
2016 LT40HD26 and Mahindra 5010 W/FEL WM Hundred Thousand BF Club Member

bkaimwood

Quote from: OlJarhead on September 20, 2016, 01:29:11 PM

I don't do this as my only job though (I have a reg full time gig) but I won't do it without earning a decent wage either.  In my mind I need to earn 33% of what the mill earns as a wage, 33% for mill operations/business and 33% for taxes....so to earn at least $25/hr I'd have to charge $75/hr on the job...I charge a little more than that but I'm getting the work at that rate so I'm not complaining :)
Great write up, OLJH...I mentioned the 1/3 rule of business management a while back, and it seemed no one ever heard of it. I can't remember what post. It is slightly different in terms of dispensements, but is not far off, and has served me well. I learned it in college, in a business management course....
bk

4x4American

I remember someone had learned me on here about the 1/3 rule of owning your own small biz.  And for awhile after, I used to take 1/3 of any pay.  Now I take maybe 1/6th and the rest goes to logs  :D :D :D
Boy, back in my day..

OlJarhead

Quote from: bkaimwood on September 20, 2016, 08:24:30 PM
Quote from: OlJarhead on September 20, 2016, 01:29:11 PM

I don't do this as my only job though (I have a reg full time gig) but I won't do it without earning a decent wage either.  In my mind I need to earn 33% of what the mill earns as a wage, 33% for mill operations/business and 33% for taxes....so to earn at least $25/hr I'd have to charge $75/hr on the job...I charge a little more than that but I'm getting the work at that rate so I'm not complaining :)
Great write up, OLJH...I mentioned the 1/3 rule of business management a while back, and it seemed no one ever heard of it. I can't remember what post. It is slightly different in terms of dispensements, but is not far off, and has served me well. I learned it in college, in a business management course....

Wasn't sure who it was that said it but now that you mentioned it, yes it was your post that got me thinking that way too...but as a subcontractor a while back I ran 2/3rds to 1/3rd (2/3rds to me 1/3 for taxes) as I didn't have any expenses really...now with the mill I run it 1/3 each but know that in the end that's just a rough way of doing things that will make sure I have taxes at the end of the year, plenty of operating expenses, unforseen expenses (like rebuilding a chainsaw ;) ) etc and of course a decent wage which in my case goes back to the mill.
2016 LT40HD26 and Mahindra 5010 W/FEL WM Hundred Thousand BF Club Member

ppine

Service is really important and wins lots of jobs.
The forest products industry is full of small-time operators that are notoriously hard to reach, and even harder to get to show up.

Mostly I just hire people to sell me fire wood now.  I will gladly pay more per cord for a guy that is dependable and doesn't try to short me.  Answering phone calls, showing up on time, and bringing a quality product can easily separate contractors from the herd.

I have had people bring me a load of wood in the back of a pick-up with no sides and tell me it is a cord.
Sometimes the wood is so green it looks like it was cut last week.
Some guys can't even tell the species apart. One brought a load of white fir and called it lodgepole pine.

Your word has to mean something. Tell the truth, under promise and over delivery and you will have a loyal following.
Forester

OlJarhead

Quote from: ppine on September 21, 2016, 03:43:07 PM


Your word has to mean something. Tell the truth, under promise and over delivery and you will have a loyal following.

This!  Absolutely!
2016 LT40HD26 and Mahindra 5010 W/FEL WM Hundred Thousand BF Club Member

bkaimwood

Amen...good, solid, sound advice all around...
bk

Sandtown Sawmil

Thanks for all the information it's very helpful!

Delawhere Jack

I run an LT40HD and have been charging $70/hr since Jan 1, 2014. In 130 jobs I've had one client who tried to beat me down on my rate. The others never batted an eye, and many of them gave me a nice tip. I'm considering raising my rate to $80/hr.

Okrafarmer

Several thoughts.

1. It's already been said, but your own individual situation should dictate what you charge.
2. You think you don't have expenses? You do, if you paid more than about $1,000 for your mill. It's called depreciation. If you don't know how to account for it, you should learn. It will really help out with your tax returns. If you paid $10,000 for your mill, that's quite a bit of depreciation you can actually collect on it. that will bring your taxes down a good bit, whether it's figured into one year (usually not) or several years, it will help. A tax professional can help you figure it out-- probably some of the people here on the Forum can show you how it works.
3. One of the key issues is-- how much do you feel happy making per hour? If you didn't pay much for your mill, and your expenses, including depreciation, are low, you might charge a cheap price, like one guy I convinced recently to go up from $25 an hour total, to $30 an hour total. He has a twenty-year-old, paid for, well used manual bandmill. He keeps it well maintained, and I really feel he could charge a little more, maybe $40. But as I said, his expenses are very low, and he may feel very comfortatble earning $20-25 /hr. for himself, and the rest going toward the expenses. His taxes are quite low due to family size and income level anyway, and he does the milling part time. I used to charge $40 / hr. for the manual band mill I used to operate, but I was not the owner. Basically I got around $15 / hr, and the owner got the rest. That was ok, because that was the wage I was earning anyway. When I stepped up to the 20-year-old WM LT-40 hydraulic, I charged $50 / hr. It had some mechanical issues and was nowhere near as efficient as a brand new one. If I mill again, I will let you know my pricing-- and it will probably be in that range, depending on what I have.
4. The area you live in-- relative expenses. We all know that living in rural Arkansas, Mississippi, or South Carolina is a lot cheaper than living in the middle of New York City. An urban sawyer in the Bronx might feel like he needs an hourly wage for his labor of $100 / hr. to make it worth it, in addition to his expenses. Or more. A guy in rural cottonwood / sweetgum land might feel like he can make a good living off $15-20 / hour for his labor. Or less. It's simply perspective.
He that dwelleth in the secret place of the most High shall abide under the shadow of the Almighty. Psalm 91:1

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4x4American

Boy, back in my day..

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