Dr. Brian Bond is the newest regular columnist to join the Pallet Enterprise. Dr. Bond is an assistant professor at Virginia Tech. He is a specialist on improving efficiency in sawmills and lumber drying operations. His columns will regularly cover general topics and the latest technology for treatment and sawing processes. Dr. Bond can be reached at 540/231-8752 or bbond@vt.edu.
With over 65 manufacturers of portable sawmills in North America, selecting the one that meets your needs can be a difficult process. The options available are as endless as the business opportunities. When purchasing a new mill, some simple planning before you buy could save you a significant amount of time and money.
Before you start ‘kicking tires’ and looking at how much horsepower a machine has, consider your expectations. Determining what you will produce will help you decide what machine you need. If you plan to produce lumber products for your primary income, the machine should be capable of higher production and more reliability than one that would only be used occasionally. Low production units usually produce between 500-800 board feet and high production units can produce 800-1,500 in an eight hour day. Production will vary depending on the sawing methods used, species and products produced. In addition, if you expect to derive a part-time or full-time business from sawing, you need to identify products and markets before buying the machine.
Portable sawmills are typically used to: 1) saw lumber for your own use, 2) custom saw for others, 3) saw purchased logs and sell products, or 4) saw your own timber supply and sell products. If you are going to saw for your own use, you should consider the true demand you will have for lumber as well as your physical limitations. When sawing for others you must know how to saw the lumber that your customers want, be able to market your services, and know your costs and limitations. Your pricing structure will greatly affect what machine you should purchase. Let’s examine two business models before looking at machine selection.
Custom Sawing
One of the most common ways to earn money with a portable sawmill is by custom sawing. There are three general methods for determining rates or prices for custom sawing: 1) production rate, 2) hourly rate, and 3) share basis.
The production rate method is the most common; however, all income risk is incurred by the sawyer. If the logs are dirty, muddy or contain rocks, you will have to spend time cleaning the logs or replacing saw blades, not producing lumber. If the work area is tight and insufficient, you may spend more time moving logs and lumber rather than cutting.
Be careful not to set one price for all lumber sawn since some woods are harder and slower to process than others. For example, sawing pine for rough lumber for barns goes much faster than sawing red oak for grade lumber. Consider setting prices that include charges for hitting a foreign object while sawing, cleaning logs, and traveling to the site and setting up the mill. Some operations charge the price of a new saw blade, plus a factor for time lost for every object hit while sawing; others charge a flat rate of down-time. The exact amount will depend on what you charge per hour and the operating costs of your machine. A log cleaning charge is either a flat rate fee or an hourly charge for production lost. Often such a charge will intentionally be set very high, and clearly identified in the contract, to discourage unclean logs. Many operators charge a standard travel rate of 20-40 cents per mile for hauling their mill.
Charging an hourly rate transfers some of the risk to the customer. It encourages the customer to provide clean logs and fairly well organized work areas, which in turn allows you to focus on production. However, your reputation may suffer if you have problems that significantly reduce your production, and high volume days may leave you underpaid.
Charging on a share basis – your customer keeps a share of the lumber and you get a share — is more difficult. You must be able to judge the potential quality and quantity of lumber that will be produced from the logs. You also must have a market for your share of the lumber. Charge a higher percentage share as lumber value decreases. This type of pricing system is advantageous if sawing high quality material and very disadvantageous if sawing low quality material.
When sawing for others, it is very important to have a written contract. The contract should include the details of cutting, all charges included, how payments will be made, the handling of lumber, waste, transportation and set-up. Most machinery manufacturers can supply you with a sample contract.
Retail or Wholesale
If you plan to saw lumber products for retail sale, it is very important to identify your market(s) before you start. Many people who consider buying a portable sawmill expect that local woodworkers will supply an ample market; however, most hobby woodworkers use less than 100 board feet a year!
Find out what the local demand is for green lumber before you start. Keep in mind that many lumber markets buy dry lumber, so you may have to consider an additional investment in a dry kiln or pay for lumber drying services in order to access these markets. Check with local woodworking clubs to determine their demand for lumber. While individuals in the clubs don’t use large quantities of lumber, they can provide a great deal of information about small companies that need lumber. Check your local phonebook for cabinet and carpentry shops. Often, large scale homebuilders need quantities of dried lumber for moldings and millwork. Also, a quick look in the phonebook or classified section of your local paper will give you a good idea of what the competition looks like. Selling lumber also requires you to have inventory on hand for customers to select, so you will have money tied up in lumber.
The advantage of selling dried lumber is that it is a value-added product. You gain a price advantage by adding value from other services, such as drying, planing, cutting to size or moulding.
If you are thinking of selling your production, consider specialty products with higher value. Examples include quarter-sawn lumber, crotch wood, thick stock, exotic species, unique figures, heavy flitches, shakes and shingles, and beveled siding.
Portable or Stationary
Whether you are custom sawing logs for others or selling lumber products you cut, the location of your mill can have an impact on your business. A portable mill gives you the advantage of being at the customer’s location. It allows for by-products to remain at the site. You do not have to maintain a log inventory, and log transport is not required. Often the customer may help by handling and stacking lumber, increasing your productivity. Also, sawmillers say that a portable operation provides a constant change or work site and more opportunity to meet people and potential customers.
The disadvantages of a portable business include the time required to travel to and from the customer’s location and set up and take down the sawmill. You have less control over log quality, and small volume jobs may not be profitable. Inclement weather, such as rain or snow, may keep you from sawing and making money.
A stationary sawmill allows you to erect a shelter over the mill for ‘year-round’ sawing. It eliminates travel and time spent to set up and take down the mill. You have more control over log quality, and you may be able to use electric motors for sawing and other processing. Of course, operating a stationary sawmill means you need land, there is a potential for zoning restrictions, and you must deal with a log inventory and waste wood material.
Safety
Sawmilling is one of the most dangerous occupations involving strenuous labor. Make sure you follow manufacturer’s operating manuals and know your sawmill’s limitations.
Be aware of local insurance and liability laws for small businesses. If you have employees, you may have to provide workman’s compensation. If your customer provides help with handling and stacking lumber, you may be liable if he is injured. You may want to consider incorporating your business to limit your personal liability.
Buying a Sawmill
When you have decided what your business will be, then you can focus on selecting a machine. Consider the lumber products you will cut. Will you primarily be sawing softwoods, hardwoods or both? Will you be sawing specialty products that require additional attachments?
Most importantly, determine the necessary level of productivity, which is more critical if you are charging by the amount of lumber produced or selling lumber. Keep in mind the set-up time, transportation and days that it will rain or snow. Productivity is greatly affected by how logs are loaded, turned, held and how taper set adjustments are made.
While most everyone would agree that a hydraulic log handling system makes sawing easier and faster, is it worth the cost? A hydraulic handling system can increase production by 50%. Again, if you are being paid by the board foot or selling lumber, such an increase in production can easily pay for itself. If you are producing small quantities of lumber for your own use, a hydraulic handling system likely will not pay for itself. Carefully consider the physical labor involved in operating a portable sawmill without hydraulics. Will you be able to hand turn logs, set log holding, push the saw and offload lumber?
Before deciding how many ‘extras’ to get, attend a machinery expo or trade show to see the equipment run. Ask the manufacturer about the price of the sawmill, the cost of hourly operation, what maintenance is required, and the expected production output. Other factors to consider: quality of manufacturing, availability of optional equipment,
warranty and availability of replacement parts, and technical service and support. If you are going to operate the sawmill as a full-time business, ready access to replacement parts will be vital to your success.
Also, you may need additional equipment to operate efficiently. If your business is going to be portable, you will need a vehicle to transport the sawmill. You may want a high pressure washing system to clean logs, a blade sharpening system, and equipment for handling and moving logs and lumber.
Whether you buy a portable sawmill for a hobby, part-time or full-time business, it is important to carefully consider your expectations for the machine. If you are going to start a business, do a little research before you buy. Take the time to go to a machinery show and see first-hand how the different machines and options work. A little time and planning in advance can save you a lot of strenuous work and some hard earned money later.
