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Author Topic: Next phase  (Read 1580 times)

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Offline carlhwv

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Next phase
« on: March 23, 2017, 02:33:51 pm »
I lurked as a guest for the past year. This is my first post.  It going to a bit long winded and spelling isn't my strong suit.  Still, I hope it stimulates some conversation.

I've had an interesting life, from growing up in rural Western Maryland farm land, spending 5 years in Montana in and out of college, 5 in the Alaskan bush commercial fisherman in the summers and raising 200 racing sled dogs in the winters, then back to MD and a 25 year career in technology and international business.  This brings me to present day and after thinking about it for the past year, we put the house on the market today.

After meeting with quite a few people over the past year while focused developing a 50 ac parcel from an unusable hillside to 5 well accessible building lots and getting involved in handling some timber during the job, I took this past Winter to put tiger a plan for the next 10 years.  This is where I could use the help.

My core business revolves around the production of high quality hard wood flooring and molding.  We will be supplying limited number of custom home builders and flooring installers in the D.C. Metro market. I'm targeting the 100 MBF of flooring a year coming off a good quality woodlot I will own. We will handle production from trees to delivery of milled lumber.

In addition I'll be looking for additional opportunities that support the core, first workimg with a small installer to grow from 1 to 4 crews, as the business warrants, and creating slab type tables for the craft show circuit. For select grade oak, at 9-10 ft installed we are the best deal in town and 4 crews is a reality.

One of the properties we are looking at...250ac... has just been cruised and the report....Im looking at the property this weekend...show a good stand of mature large sawtimber with good potential of oak veneer logs. Of the 2,500 MBF reported, 1,900 is ready to harvest and for this tract specifically, I'm thinking about gearing up and over the next few years, selling 20-40% out of the gate of what is standing to finance the rest of the operation.  This property.....it has electricity, a weekend cabin, good water, a 40x60 building, and good land for additional work area and on paper good timber, but no internal road system.....is what is diving my call to action.

From an equipment perspective, I have a 70hp utility tractor, F350 and gooseneck and have budgeted for a skidder and enclosed trailer. Not sure if I'll get a log truck. Ill need to weigh out transportation cost once I decide on my woodlot. I am hunk we can get the road in with a D6 and a little time from a trackhoe.  Probably rent/hire help here as I did for my road in TN last summer.  I found this was money well spent.

I need guidance to fully equip my shop and I'm looking to get what I can on the used market. Also, figuring a 10 MBF kiln. Need help in this entire area. The first year I'll only be supplying one crew and building out my infrastructure. With luck this will include a small timberframe.  I was a helper raising one in the Alaska bush and have yearned to have one of my own.

So, this is it in a nutshell. Looking for any and all feedback. This is my play to support us over the next 10 years and maybe beyond. What do you think?



 

Carl

Offline coxy

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Re: Next phase
« Reply #1 on: March 23, 2017, 06:15:52 pm »
 welcome to the FF   looks like you know what you want to do that's good :)  only 2500bf of logs on 250a  :o is it mostly farm or did someone butcher it the last time  regardless I hope you fulfill your dream and hope you keep us along for the ride  :) :)

Offline carlhwv

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Re: Next phase
« Reply #2 on: March 23, 2017, 07:46:54 pm »
Thanks for the welcome. Did I get the abbv wrong? Isn't 2500 MBF = 2500 thousand board feet, or 2.5 million board feet? If not my bad as 2.5 million is the total cruise.

The stumpage price estimate per thousand for the oak, which is most of what is present, is in the $150-$550 range, varring per species and Vermeer vs saw logs. For estimation purposes, can I figure double this for logs delivered to a mill?  If I go with this piece of property I'll need to recoup some of my initial investment to capitalize the operation and would like to sell a portion of what I would be buying up front.

Carl

Offline TKehl

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Re: Next phase
« Reply #3 on: March 23, 2017, 07:57:58 pm »
Welcome!

You'll need airdry space, a kiln (or four), and dried lumber storage (humidity controlled at least). 
Don't see anything about that listed.

My biggest question is why do you want to buy the forest and tie up all your capital?  Especially when asking about used equipment, sounds like you will need it.  The most value would be buying logs or rough sawn lumber, turning to flooring, and installing.  I'd be like wanting to open a McDonalds, but needing to buy some pasture and cattle first. 

If the timber is being used to finance the land purchase as the ultimate goal, I get it.  However, I'd recommend starting at the floor moulding stage and working vertically up the supply chain a step or few at a time.  A wise man told me that cattle will pay for the land, but the land won't pay for the cattle.  Not a perfect analogy, but the best this farm boy can do today.   ;D

Also, I could be wrong, but my ear hears that you are passionate about the forest/timber management/logging side of things.  Should you consider focusing there more?
Lucas 6-13+slabber, Mr. Sawmill bandmill, orange chainsaws, JD SSL, Case Backhoe, farm tractors, trailers, and 150ish acres of trees.  Fledgling woodshop with CNC router, laser engraver, Woodmaster 712, and a Berlin 108 moulder (project).  Oh, and a lovely (patient) wife and four offbearers.

Offline killamplanes

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Re: Next phase
« Reply #4 on: March 23, 2017, 10:29:48 pm »
Well you do have a big idea there. I don't know what capitol your working with but I know this will require a whole lot of equipment. I don't do flooring but I do go from tree to final product (pallets). I buy timber (not the land). I sell the good stuff to other mills and keep the junk. Opposite of your plan. Anyway it's alot of work and equipment and it took me basically 5 yrs to get it running like a sowing machine. I have several other businesses to keep up with also.
   I don't believe I would start by buying land unless there is other motive behind it. With that said I also own several hundred acres, but didn't do it for timber, but farmland.
  I personally would buy a little track of timber cut it and start there. But realizing from the first tree cut to the first check from a flooring job will be a long time.  That's why maybe buying trees off a tract, cutting, selling a good portion of logs to mills and keeping some for your start up business. Just my2c..
jd440 skidder, western star w/grapple,tk B-20 hyd, electric, stihl660,and 2X661. and other support Equipment, pallet manufacturing line

Offline BargeMonkey

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Re: Next phase
« Reply #5 on: March 23, 2017, 11:42:59 pm »
 I don't want to blow your post up, but we have been down this road and I will show you some pictures of our mill operation, it's taken a long time to work the bugs out and we aren't done yet, the first circle mill showed up in 1994. 

 
 That's a timber harvester mill, Cook makes the clone now. Unless your talking huge logs I would stay away from a circle mill and resaw, we had 2 circle mills and 1 band mill at one time all running together, it's not worth the hassle. Sawmill equipment is cheap if you know where to look and know what your looking for. For flooring and lumber you don't want a midget mill, something medium sized will saw 5-6000 ft per day with 2 people. If you have the money a hydraulic turner and a mudsaw is well worth the money. 

 
 That's a Meadows gangsaw and a large single sided planer, I don't care what anyone tell you but your going to pre-plane your flooring unless you throw down on a huge expensive flooring machine, bandsaw runs 1/8, the longer the stuff the worse it gets. We also have a large edger set up off the mill, kind of hard to show pictures but giving you rough ideas. 

 
 That's a Swedish "Logosol" moulder/planer. Any knife combination you can ever think of, we make ALOT of flooring sometimes. You would be amazed at what you think is junk and how nice it saws and what you can actually make. Again you can find used low hr sawmill equipment all over, don't tie up a fortune but there is some stuff you want to avoid. When you say "electric" you need to know how many amps your service is, and if you have 3phase power, that's HUGE if your going with electric sawmill equilment. Don't mind the dust, we haven't been doing much this winter in the mill. 

  

 
 We manufacture survey stakes from low grade, but when your sawing alot of times that 2nd-3rd board is nice enough for a piece of flooring, we pull that and set it in a separate pile. I shipped 6,000 2x2x8' stakes with that notch cut in them down to do the Whitestone bridge job, I also cut and shipped the hemlock logs for the Brooklyn Battery Tunnel job, if you find a niche there's money to be made. 

 
 Our kiln is the 2nd building on the left, it holds about 3,000 running feet and depending on wood species depends on dry time. There is an art to running a kiln, knowing how to stack for airflow, your going to warp some boards till you figure it out, alot depends on the kiln you buy. The mill / kiln is heated with an OWB in the first building, 40x80 lumber shed is last on the left. You want to set up everything so your not killing yourself, avoiding labor is key. There's a door behind the logosol, stuff goes to the planer on a lift, go back out onto a lift, it goes into the kiln on a platform made with tracks and sliders, rehandle boards as little as possible. You can make alot of nice quality flooring quick. 

  

 
 Its doesn't take long for the cost of stuff to add up, sharpeners, setters, blades, bearings, all stuff to keep in mind.
 As far as logging goes, you will want to see what your market looks like. If you own 2.5mil ft of decent wood already you've got 3/4 of the problem solved. There's big money in flooring, if you can literally supply yourself, manufacture the product and install yourself for a reasonable price you've got something going. You've got alot to think about, the nice thing is right now you can buy ALOT of equipment for cheap money. 

Offline mike_belben

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Re: Next phase
« Reply #6 on: March 24, 2017, 01:05:15 am »
Of all the people i know in "small" business, the recurrent trouble regardless of whether its a gun shop, junkyard, scrap, demo, trucking, septic etc etc.... Is a lack of good help. 

I dont care if you have Jesus's credit card.. Building a shop and logging roads and falling/bucking/moving timber and sawing and transport of finished product and books billing insurance payroll etc etc..  Each is a department of its own.  Youll be spread pretty thin without a dedicated staff of talented hard workers.  Have you got the crew for this operation?

Offline TKehl

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Re: Next phase
« Reply #7 on: March 24, 2017, 08:45:55 am »
Barge, do you endmatch your flooring?

Awesome setup by the way!
Lucas 6-13+slabber, Mr. Sawmill bandmill, orange chainsaws, JD SSL, Case Backhoe, farm tractors, trailers, and 150ish acres of trees.  Fledgling woodshop with CNC router, laser engraver, Woodmaster 712, and a Berlin 108 moulder (project).  Oh, and a lovely (patient) wife and four offbearers.

Offline carlhwv

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Re: Next phase
« Reply #8 on: March 24, 2017, 09:53:17 am »
Thanks for the feedback guys.  This is exactly what I was hoping for.

First, on the subject of buying the land...my thinking is I need a place to live, as we are selling our home and relocating.  More importantly, for my goals of 100 mbf a year, the property in question will most likely supply me for the foreseeable future with some surplus.  Also, from a tax and other business reason, having a standing gain and the ability to use them is a good use of capital for my situation.  Having said this, I will only purchase it if it fits my broader needs of site location and I'm not paying much of a premium for the real value, the timber on site.  I might be missing something here, and I'm open to think it through more. 

Is it fair, as a base assumption, to figure the 'worth' of the timber, delivered, that is what a mill would pay me or what I would pay for logs delivered to me, is about double what I see on the timber cruise? Based on the information I have on the sell side it seems like a good estimation but I'm not sure what it would cost to have material delivered to me.  I probably need to look at this a little closer, but I still think all things considered, because I need a base of operation, if I can get the property and a reasonable price over the cruise....I'm thinking 20% over for having it in my backyard an asset....it will make business sense.

I complete understand the importance of having good people.  I've proven this out over all my life and it definitely works into my equation.  I'm 55 this year and definitely want some younger strong folks that I can provide a good opportunity to, even to the point of turning things over much further down the road.  in my plan, if I'm using 700k revenue as my baseline and fitting other costs in accordingly, with personnel being a key component. I don't have them yet, but I will.

Barge, thanks for sharing your setup. I'm still working through my mind how much time I'll have to spend on each part of the supply chain.  My focus will be one business and process management and primary operator for moving and milling.  Because my time and that of the couple other guys I'll have on this end will be split between multiple duties, I need to make sure I have the right equipment to do enough work in the time allocated.  When you said a 5-6000 bf/day mill, it made me think and provides me with an idea of how much time it would take to cut 100,000 feel of product per year. I need to think this through for each step.

Also, you are the second person that pointed to the logosol.  Need to get more information and start keeping my eyes open.  I've found a couple of larger auctions on line and I'm beginning to get an idea around cost for various pieces.  I agree a planner and a joiner are must haves.

I know nothing about kilns, but I know I need to learn.  For my situation, I'm wondering if I would have one larger one or two smaller....I like redundancy and what I perceive it will allow me to do with two, but agin, this is area I'm just learning.

I appreciate all other views.  I know I'm taking a bit of a flyer here, but having had a couple different businesses and with the connection to the final install side and the opportunity to have some in place to manage and build that part out will be a big benefit to me.
Carl

Offline TKehl

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Re: Next phase
« Reply #9 on: March 24, 2017, 11:03:14 am »
We are on similar paths, though I donít intend to hit your scale of operation as I donít like having many employees.  Iím also easing into it a piece at a time as a side hustle  as I can afford equipment.  My risk tolerance is pretty low though as the almost sole income with a wife and 4 young kids.  Need to build a kiln this summer.  Planning to redo the floors and cabinets in the farmhouse with wood from our land to make our house a showpiece.  Will have to start using my shaper and Woodmaster moulder as thatís what I have and I canít justify the 4 sided moulder yet.  (It will be slow, this I know.)

Iíve learned a lot here:
http://timbergreenforestry.com/Making%20Flooring.html
http://timbergreenforestry.com/Installing%20Flooring.html

Canít answer the pricing question.  We have 150 acres of timber on the farm that we cut from and access to lots more for free to peanuts. 

Logosol was first on the market with a moulder of this size and has many adherents.  Baker has one that is US made that Iíd strongly consider.  Everything Iíve read says as long as you give either machine good blanks (straight, not too much material to remover), they both work fine.  Another US company is purportedly working on releasing one in this size range in the near future as well.

What are the species of trees on the land in question?  Are they suitable/desirable for flooring? 

Also, donít overlook moulding/trim/casement type work.  If you already have a flooring moulder, you only need different knives.

It just makes me nervous when it sounds like someone is making a major shift and a major investment to create a business from scratch.  Itís a lot of work and takes time.  The easiest way is to start the operation on the side to get contacts, supplies, and workflow somewhat sorted out.  If jumping straight in full time, make sure to have a couple years living expenses tucked away above and beyond the capital expense plans + fudge factor.  Itís not just the machines, but running power to them, buildings, breakdowns, accessories, etc. that can really add up.  Starting small also keeps mistakes small.
Lucas 6-13+slabber, Mr. Sawmill bandmill, orange chainsaws, JD SSL, Case Backhoe, farm tractors, trailers, and 150ish acres of trees.  Fledgling woodshop with CNC router, laser engraver, Woodmaster 712, and a Berlin 108 moulder (project).  Oh, and a lovely (patient) wife and four offbearers.

Offline carlhwv

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Re: Next phase
« Reply #10 on: March 24, 2017, 03:39:01 pm »
This tract is primarily Oak. Looking at cruise sheet, it shows there is a good stand of 170,000 bf of 28" plus red oak. There is another 1.1 million feet red white, and chestnut oak in the 20-26" size.  For mounding it's got 150,000 of +24" poplar, between 50-100,000 of hickory, hard maple and walnut 30,000 of cherry.  The remaining large sawtimber falling into the pallet wood catigory.

I should have enough raw material for the next 10-15 years, projecting 100,000 bf a year. Most people in the segment we are serving go with oak floor and poplar is often used as a lower end option for crown molding that is going to be painted.

And yes TK, this is a risk for me, as I have no experience in this field, as a business, other than what I did last year and my connection on the install side.  I do have a good deal of general business experience and I'm counting on finding a few good people to join and hopefully buy into the vision.

My days of going all in are limited to a Friday poker game with $100 buyin. I wont do anything that would prevent me from paying the bills without personal income for a while, which I feel is key.  That and not making a big mistake over capitalizing without being able to generate cash flow will be important.  This...the equipment side of the equation...is the toughest part for me and my biggest risk point.  Good used stuff fit for purpose will help me a lot.

Most jobs right now on the install side have a 3-6 week lead time. A big part of this I belive is going to be managing the supply chain. Two small kilns probably make more sense rather than one larger one, but either way they will be on the small side.

I've got a lot to learn and hopefully God will give me the time I need for it.





Offline dustintheblood

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Re: Next phase
« Reply #11 on: March 24, 2017, 06:15:00 pm »
For what I'm going to throw into this conversation, it may be worth a cup of coffee if you add a dollar, but here goes.

The flooring market's bigly for sure, but remember that it's very old and full of deeply entrenched manufacturers that have decades of experience and economies of scale on their side.  Furthermore, there's an every expanding influx of offshore woods coming in displacing domestic (and yes I refer to our Canadian wood as well as American wood as "domestic" combined) supply.

Barge, your place looks eerily similar to mine, except I'd hung up the business hat years ago and now use it for my own personal pleasure.  In retrospect, chasing those high-profile, high margin projects were awesome.  They were exciting, lucrative and I'd do them all again - however - they don't float the boat.  When you cut a log you have to have a market for everything.  As they say in the pork market; "have a customer for everything including the squeal".

Hope this all works out for your Carlwv, but man oh man, having to deal with all those links in the supply chain right from timber to finished floor in one shot right off the bat sounds like you're taking a real big high dive.
Case 1494, Igland 4001, Hardy 1400ST, WM LT40HD, WM Edger, ICS DH Kiln, plus other toys - cause well - gotta have something to play around on

Offline GAB

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Re: Next phase
« Reply #12 on: March 24, 2017, 08:42:29 pm »
Carlhwv:
Concerning your words; "and spelling isn't my strong suit" don't feel bad as many of us are in that boat with you.
I occasionally see words that I think are in a different language. I feel that sometimes it is a failure to convert from ones native tongue to english. 
I would advise you to locate your work site such that you are not bothering any neighbors with noise, should you decide to operate in the evenings to meet schedules or deadlines.
Also not knowing what the local laws or zoning rules are: Is there a possibility of buying a portion and taking a multi year option on the balance.  This could possibly be beneficial to the owner tax wise, and leave you with more start up capital.  Another possibility might be to buy a right of first refusal for any offer(s) the owner might entertain.  If you do either make sure to record them in town records to preserve your interest otherwise it could be your word versus someone else.
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Offline BargeMonkey

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Re: Next phase
« Reply #13 on: March 25, 2017, 12:18:57 am »
 I agree 100% with everyone else, help is going to be the biggest downfall, better equipment cuts out labor. I personally haven't laid down flooring that we have manufactured, no carpenter here. We work closely with a guy who does timber frames, buys alot of them and sends them back down to TX, his family did W's house in Crawford, he uses a fair amount of our flooring, like anything we can do it but we don't have the time to push to be big at it.
 Baker makes good stuff, woodmizer, honestly if I was going to buy a NEW medium sized band mill I would buy a new Cook mill. They make a decent edger also. Our mill will saw 5-6k ft a day with 2 guys, that's hustling. You can not put irregular boards thru a logosol, and as accurate as you think your mill is its not. We run everything thru our big planer first and get it close that way the logosol doesn't struggle. What you can do as far as knives and diff styles is amazing, ours is set up to cut relief grooves in 6" wide TG flooring right now.
 I was a kid when the first mill showed up so I've been around alot of it growing up, you've got a great idea and I don't want to deter anyone but that's alot to crunch into a small amount of time if your looking to jump into this headfirst. We have been building the sawmill up for 20yrs, add something this yr, do that the next, it's been slow and expensive. It doesn't take a huge operation to set up a small mill, logosol, depending on how your building is I can't stress how nice a sawdust system is, ours goes the length of the building. If you watch I'm willing to bet you can find someone with the equipment your looking for in a complete package, low hr. There are courses out there that will walk you thru a kiln, I know Nyle makes a nice kiln. Honestly if you go "HUGE" in the sawmill /flooring world, especially up here the bigger guys would eat you up in 6 months and buy what the bank doesn't pick up or you wouldnt be able to buy enough wood to keep going and keep the lights on. Make a quality product, even if you sold 25k ft a month which is still a huge amount to manufacture off the stump.

Offline mike_belben

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Re: Next phase
« Reply #14 on: March 25, 2017, 02:37:39 am »
1.  Never count your board feet before they are on the ground.  I dont care how good your cruise reports are, there will be some beautiful trees that hit the ground and break your heart with ant bores, heart rot, even hollow centers. 

2.  If this stand has that many large dominant trees then itll probably have a very closed canopy, creating a huge amount of stunted twisty shade tolerant mid story species, and probably a lot of choked out or heavily deer browsed floor.  Not only will you need access roads to get to the big wood, youll need ROOM to drop them and not crush their replacements, room to skid them and not rub all over their replacements.  Youll likely need to cull a lot of undersirable wood.  Think 50% or more.

  A lot of loggers make their money highgrading a site, especially in appalachia. The landowner says i want to log that 50 acre corner over there. The logger says sure i get half of the check from the mill.. Then pulls out only the choicest stuff, leaving you with the blackjack and scarlet oak, the sassafrass and sourwood and soft maple and every other crooked stunted piece of junk to spread its crummy genes.  The logger goes on to the next choice site but youre stuck with the forest you got.  If you want it to produce top logs forever.. Its gonna take good forestry practices and thats a lotta culls, a lot of eliminating competing trees to favor the future crop tree..

 Culls pile up everywhere, to the point you have to haul them out of your way to go any further.   Have a plan for this first.. Perhaps even make it the first stage of your business.. Get your numbers down, decisions made and equipment on site before you start hacking.  You need to know what its worth as pulp, as log length, as cut and split, as chips.  If you can legally transport firewood to the DC suburban area it might be very lucrative.  If you dont want to be a firewood processor, partner with someone who does.  This will be a symbiotic relationship. You will not be making money by dragging sourwood limbs out of your way.  IMO... Get a cordwood operation setup onsite.  Let those proceeds buy your buildings, your OWB, etc.

3. Go to every mill within proximity of your site.. Get price sheets, meet the owners and let them know youre a new landowner with timber to sell.  Theyll make time.  Find out exactly what operation they do, ask what they do and dont want to see you hauling in, what the worst mistakes are.. What markets are getting better and worse for them.  Ask when its best to cut a long log down to shorter to raise its grade.  Theyll tell you, becase they want the best logs they can get, become a "partner" in their endeavor and itll pay you as well. 

Each mill will have one or two things they pay better than the others on but theyll want it cut a specific way.  Plenty of your logs wont suit your needs but will suit the other guys.  Sell them, let that buy your kiln instead of your credit line. 

Keep these price sheets and cut dimensions handy.. Use them to draft instructions for whoever bucks your logs.  Do not park some slob on the landing, you want your absolute sharpest guy up there deciding that instead of sending that corkscrew oak for pulp, he can pull two 8' tie logs for joe and one 6' stave for bob then the other 20' into the firewood processor.  Do not make your bucking guy work hard.. Reward him for working smart.  Like a machinist, measure measure measure, check the print, measure again, then make chips.  I personally dont think youll get the best cut decisions from a slasher operator.  I have to squat down and walk around a log a few times to see all of its crooks and cut them best.  I dont know if you can be as precise way up in a cab.  Plus its one more piece of equipment to maintain.  Sure theyre fast, but i dont regard fast forestry as necessarily good forestry.

4. Equipment wise.. If you are on clay.. Nothing but a dozer on swamp pads can work through a clay mud season IMO, 4 wheel skidders turn clay + rain into milkshake.   A dozer isnt that fast, but a skidder doesnt build roads, landings and building sites.  If you had a dozer first, you could skid with it in the beginning (or pull a forestry trailer) and build roads suitable for a forwarder.  A forwarder can keep you from dragging a lot of mud, rubbing a lot of your good trees and making so many trips across the property.  If your logs are clean, you could save a ton of money and have one less operator to pay by not needing a debarker and the associated infeed/transfer conveyors.  Im making a lot of assumptions here that your property is comparable to mine.. Food for thought, things to consider.  Your mileage may vary.   

Offline mike_belben

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Re: Next phase
« Reply #15 on: March 25, 2017, 02:46:03 am »

Also.. Grow every nut species that you can.  Every dang critter in the woods eats acorns.  If you have hickory nuts all over the place.. Maybe that deere leaves 20 more oak acorns for the squirrel to bury.  If you have a shortage of squirrels, its time to start counting your coyotes and hawks
 

Online Ianab

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Re: Next phase
« Reply #16 on: March 25, 2017, 04:52:42 am »
The problem I see with this sort of venture is having to be a "Jack of All Trades".

Now I can take a standing tree and convert it into a piece furniture or some other finished product. So I understand the various stages involved. Doing it on a commercial basis is a whole other can of worms,

My day job is computer support for businesses. So over the years I've done work for loggers, trucking companies, sawmills, wood processors,  joinery shops and contractors / builders. One of our long term customers can do pretty much the whole chain, from sending their truck to the landing to pick up logs, through to building a whole house, using largely the same wood. But it's quite a large business, 50 or so staff in various areas. Stuart the General Manager is a qualified accountant and spends all his time doing management stuff with a team of accounting and sales people. They have a mill, kilns, treatment plant, 2 lumber yards and a hardware shop. 

The main things that seems to kill forestry businesses is too much debt. They have to borrow too much to set up the whole operation. Each part of the business might technically turn a small profit, but the whole isn't enough to keep up with the debt. Most of the businesses I deal with try and stick to just some part of the chain.

My suggestion would be to work out what parts of the chain you want to start with, and get those established first. If your experience is installing hardwood flooring, then start from that end. Kiln and machine shop so you can buy in green sawn lumber and add value to it. If you buy the forest land, first harvest may be sold (under the supervision of a good forester) Generate some some sustainable income there, to supplement the stuff you do at the other end of the chain.

Maybe in the future the sawmill / logging side will be practical. Or the stuff you are doing will be more profitable, and you expand the drying and machining side of things. Another timber company I work with has no sawmill at all. They have millions tied up in finger jointer / optimizer / planer moulders / kiln / treatment plant.  They have business links with various sawmill that supply them with with greed sawn lumber that they then process and sell wholesale.
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Offline DMcCoy

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Re: Next phase
« Reply #17 on: March 25, 2017, 08:06:20 am »
My industry is different - wholesale plant nursery supplying landscapers and garden centers. 
Some people have tried to do it all, growing to selling or installing.  Out of the 8 or so I know who tried 2 are really good at it, 4 have quit and went back to their core business, 2 are struggling.

The ones who were not great at growing plants still insisted in buying plant material from themselves or from their off shoot company.  They needed their money back, but poor quality doesn't sell.  If they grow too much of the wrong thing and try and push it out the door? Clogging their store shelves with inventory that isn't paying the rent.  What problems I watched with the vertical integration of the nurseries is material flow.
 
If you are looking to install what happens when you have 100mbf of some oak sitting in storage but the customer trend is for hickory and you are out?  An independent installer can buy only what they need.  You might get stuck with some lesser demand type of flooring and it starts to clog up the works, what then?  You might want to sell it but to whom, do you have a ready established market and connections?  An independent sawmill can buy logs of the species they want, the species in demand, and not their own trees to because they need to pay the bills in that part of the operation.

Flow, in our industry it's called turn.  In 28 days you can turn a crop of bedding plants. So you must have seeding done every week, or buy in seedlings,  plant them up and hope the weather is good so they sell because your greenhouses will get jammed up super fast and that puts everything in a bind.  Rain = big dumpstacks.  Lumber looks a lot safer than nursery imho but I'm sure others could point out their own fiscal danger.

From what I have seen having a common financial interest in what could be as much as 4 separate businesses is something to watch very carefully, yours- logging, milling, kiln operation, and installation.   Each one by itself could make good economic decisions for and only for itself.  Each part will have it's important nuances, need an aware and skilled leader.  There could be marketing involved for byproducts, kiln time, etc.

   


Offline mad murdock

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Re: Next phase
« Reply #18 on: March 25, 2017, 10:17:59 am »
For a change of thought on processes and procedures, you could reduce the need for a lot of handling equipment if you were to implement something like Logosol's LAKS framesaw, cut cants with a portable swing blade mill reduces your need to handle logs in log form a bunch and you could load the cants then the framesaw for final rough cut flooring right there in the woods, then haul the boards to your planing moulding process after they have been through your kiln. The primary reason I selected the mill I have is for being able to mill with minimal log handling, reducing dependence on equipment and increasing my access to larger sawlogs by reducing my footprint on the land(not needing t being large equipment in to move logs around around.
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Offline carlhwv

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Re: Next phase
« Reply #19 on: March 26, 2017, 06:11:21 pm »
Thanks to everyone who shared their their thoughts, experiences, perspectives, perceptions.  I feel like I've been able to ammase the cliff note version of a dos and don'ts manual.

In a nutshell, my idea is validated and I believe as long as I take the time I need, do thinks in steps, limit my debt, use all of raw materials, have good markets for my products, get the right equipment for the task, and most importantly secure the oprational knowledge I need to make sure the respective job is done right.

If I could, I'd track a huge of you down for a cup of coffee or a beer...depending on your preference....:).  Don't be surprised to see post around a more detailed subject or made a private note to clarify something you said here.

Again, thanks again for everything.  Stay safe and happy.
Carl