Setting up a milling business
How much land, what equipment is needed, and in what order, for a startup sawmill. April 24, 2002
I would like to open a small lumberyard to showcase the quality lumber that I mill.
1. How much land would a person need for a log staging area, log deck, mill, storage building, at least two kilns, store and parking area?
2. In what order should equipment be purchased? Starting with a very tight budget, I plan on having a mill, 4wd 50hp+ tractor, skidder for tractor, edger, wood/brush chipper, bucket truck, two kilns, hwy towable log trailer, several pickup trucks or even a tractor/trailer setup.
3. Where can I get a highway towable log trailer that a HD pickup truck can tow?
Get 5 acres minimum.
3. 1 kiln
4. winch for tractor
8. bucket truck
9. second kiln
10. a partridge in a pear tree
That's the order I recommend. You don't need 2 kilns immediately, and for a while you can edge on the mill.
The towable trailers can be very expensive. I think Timber Harvester deals them. I recommend a used log truck instead. Same price for a decent truck. They don't have anywhere near the capacity, either.
I have $100,000 invested for 5 years. When that is done, I'll buy a house for $150,000 for 5 years. Refresh my current equipment for 3 years, and add on for 3 years at a time. I am hoping I do things sooner, but that depends on the bank and how many 26 hour days I can take.
You don't have to go that expensive. If you are handy, you can pick up used equipment for cheap. I bought a 6 ton, 20 foot trailer for $400 at an auction. I'm going to replace the axles with some that have brakes for another $600. I have a 60 hp diesel tractor (no loader) that I paid $9000 for, with hay baling equipment.
Get the truck first. You can get a serviceable 1 ton truck for under $5k. Now you have something to tow your mill home with. The mill is next, after some serious shopping and research.
If you don't have anywhere to put all this stuff, you might have to go for the land first. Commercial land with enough exposure to support a retail store is expensive. Consider having the mill and log yard on rural land, and setting up in a rented place for the store.
You'll need help to cover all these facets of the business. Next would be your kilns and a planer mill. Retail customers are going to want to see a finished product, unless your area has enough serious woodworkers to support the store. The average weekend carpenter won't recognize a good board if it isn't finished.
Less then 5 acres and you will not be able to move. After the mill you will need a 4x4 1 ton truck (diesel preferred). 4x4 50hp+ tractor with loader and pallet forks and bucket. I have a 27 foot gooseneck flat bed trailer with dovetail end. It hauls logs, slabs, lumber and tractor around. Kiln and moulder/planer go hand in hand. I would put in a DH kiln as it is less worrisome and more time dependable. Sheds with concrete floors and large overhanging roofs, 12 ft high. You will never have enough of them. After that it will depend on which way your business goes. Looking for land, I would consider a 3 phase power source a big plus as well as room to grow. Used is cheaper, but if it breaks you are down and must fix it out of pocket.
The first item (tool?) is clearly a cash register. I'm serious. If you want to make a business out of this, then from day one think of it as a business. Think cash flow, but most importantly think cash!
You might add a subscription to Sawmill and Woodlot to your list if you haven't already. There are a lot of ads in the back of that little magazine to point you in the right direction.
And there is a lot of excellent info. Gene writes a lot on grading drying...
From the original questioner:
I already subscribe to "Sawmill and Woodlot". If I could I would buy a lot in my town's growing industrial park. After some personal debt is paid, the milling land is first. I agree with the five acre minimum idea.
1 - Sawmill (portable - I assume you have a pickup to move it around). Portable mills are versatile. They can be used on site for cutting customers' lumber with no material handling equipment, or they can be used to cut your lumber at the woodlot or even to work on shares during the startup period.
2 - Material handling equipment. Tractor with forks, off road forklift or something of that nature. Think big. What is the weight of 1000 bd ft of oak? What size package are you going to work with? A good used 6k loader is way better than a tractor.
3 - Log truck. Not another pickup with a trailer, but a 26000 lb or larger truck with a loader. If you are looking for a smaller truck, a steak bead loader combo will work fine. This offers a start up system with pick up of logs and delivery of lumber. Additionally, you are below the CDL requirements and are more mobile in small areas as well as cheaper for insurance and tires. But a larger truck will save time and money handling logs in the long run.
4 - Storage building (before the kiln is ready, because as soon as you have a kiln, you'll need a place to put the dry lumber and planer).
5 - Kiln.
6 - Planer.
7 - Edger. Why last? If you are going to work towards KD lumber, speed isn't the key. You can edge on the saw and save $7000 + while you are expanding in other areas. You probably are working alone initially to save overhead. An edger is a 2 man job, and working in conjunction with the sawmill creates a 2-3 man job.
I am in the middle of these questions myself. I've had a portable mill for 6 years and have wanted a boom truck for about 5 years and 11 months. Just got a 24" Oliver planer (I know, it's way out order, but it was a good deal), and have been trying to figure out if I can fit the whole setup into a corner of the land I live on or if I should look for another piece of land. For me, the boom truck needs to be next, although in the meantime I have a flatbed trailer for small batches of logs. Chasing the portable business around gets expensive and time consuming. I would love to get set up stationary.
You might want to sell some green lumber at first for quick cash. Building your mill things can get pricey real quick.
The comments below were added after this Forum discussion was archived as a Knowledge Base article (add your comment).
Comment from contributor A:
The first thing you should buy is insurance for your logging and milling business. Then incorporate yourself to protect your personal assets. Most states require you to have workman's comp insurance in case of a work-related accident for yourself and any employees. Logging and milling is one of the most dangerous professions and that is why the insurance premiums are high. But the most expensive insurance is not having it. I'm not an insurance agent nor do I have much admiration for an insurance company, but you can't stay in the woodworking business without it. This is just a 78 year old forester's opinion.
Comment from contributor B:
First you need land for the trees. Buying timber is not profitable. I started buying foreclosed tax lots for pennies. I now own 1,100 acres and it takes me almost seven years to cut them. By then they grow back. Plus you should plant six trees for every one you take. If you buy used, you will spend all your time fixing things and not sawing. So invest 100,000 or so in saw, edger, cherry picker, wood processor and about 200 a month in ads for the business to come in. By my third month I was doing 12,000 a month and now average 15,000 a month all by myself.
Comment from contributor P:
The mill must be first, then the truck to haul and tow with, and then a trailor that will haul at least 20 foot logs. If you get a chipper you won't need as much land for slab storage. Now you have your mill running and you can build your own kiln, whether it be solar or wood stove heated. If you need two kilns just add to this one. Finally, you need to go and find a timber base that can keep you supplied.