Can you make any money with a portable sawmill?

Quick Answer

Yes, it is possible to make money with a portable sawmill business. However, there are several factors to consider when determining the profitability of a portable sawmill operation. Some key points:

– There is market demand for custom cut lumber from small, portable mills. This allows millers to sell lumber directly to end users.

– Profit margins can be reasonable, but largely depend on efficient operations and accessing low-cost logs. Profit is highest when the mill owner cuts their own trees.

– Startup costs can range from $3,000 for a basic portable mill up to $50,000 or more for larger equipment with more automation.

– Ongoing costs include maintenance/repairs, fuel, supplies, transportation, labor, marketing, etc. Controlling costs is crucial.

– Most small portable mill businesses operate on a part-time basis along with other work. Full-time operation is possible but requires significant workload and efficient processes.

– Key factors that impact profitability include: equipment capabilities and costs, sources and costs of logs, operating expenses, a solid customer base, sound business practices.

– Overall, portable sawmilling can be profitable for some owners, especially those with access to their own timber. But it requires a substantial time commitment and efficient operations.

Is there market demand for custom cut lumber?

Yes, there is demand for custom cut lumber from portable sawmills. This demand comes from several sources:

– Hobbyists – Woodworkers and hobbyists often want specific thicknesses, widths, or cuts of lumber for their projects. Portable mills can provide specialized small batch cuts.

– Farmers/ranchers – Rural landowners sometimes need lumber for fences, barns, or other structures. Portable mills can cut it on-site from their own trees.

– Homeowners – Homeowners working on construction or remodeling projects may want custom lumber sizes or species not readily available at lumber yards.

– Commercial accounts – Some businesses like craft shops, furniture makers, lumber yards, or construction companies may contract with portable mills for speciality cuts.

The custom cutting service portable mills provide is appealing to many end users. This allows millers to sell lumber directly to customers at retail prices rather than only selling logs to larger mills at wholesale log prices.

Key Custom Cut Lumber Demand Drivers:

– Specific lumber sizes/dimensions – For hobbyists or custom projects.

– Custom lumber species or grades – Specific species or quality not available commercially.

– Drying or storage of lumber – Kiln drying and storage services.

– Local and fresh cut lumber – Minimizes shipping costs and time from mill to use.

– Unique/artisanal lumber – Slabs, burls, extra wide boards, etc. for specialty projects.

– Mobile milling capability – Ability to cut logs where they fall, on-site at customer’s property.

What profit margins are achievable?

Profit margins for portable sawmill businesses can vary substantially based on the particular operation. Here are some guidelines:

– Retail lumber prices typically range from $1 to $5 per board foot, depending on species, quality, and market conditions.

– Wholesale log prices for mills range from $0.10 to $0.50 per board foot.

– So the potential gross profit margin for milling lumber is $0.50 to $4.50 per board foot.

– Operating costs will range from $0.25 to $2.00 per board foot.

– Therefore, potential net profit margins are $0.25 to $2.50 per board foot.

– Top performing mills with efficient operations and low log costs can potentially achieve 10-20% net profit margins.

– Profit margins are highest when the mill owner cuts from their own timber. This eliminates log purchase costs.

– Margins tend to be tighter for production-focused mills at around 5-15% range.

– Part-time and hobby mills often achieve higher margins of 15-30% on lower production.

In summary, well-run portable milling operations can potentially achieve 10-30% net profit margins depending on production levels and operating efficiency. But margins are highly variable and directly impacted by log supply costs and operating expenses.

Factors That Impact Profit Margin

– Source of logs – Own timber vs purchased logs.
– Log costs – Major cost driver.
– Lumber selling prices – Depends on local markets and demand.
– Milling efficiency – Production rates and labor requirements.
– Equipment costs – Maintenance, depreciation, financing costs.
– Overhead costs – Fuel, supplies, insurance, utilities, etc.
– Business model – Part-time vs full-time. Retail vs wholesale focus.

What is the cost to start a portable sawmill business?

The startup costs for a portable sawmill business can range quite a bit depending on the size and features of the milling equipment selected. Here is an overview of typical startup costs:

– Basic portable sawmill – $3,000 to $10,000
– High quality portable sawmill – $10,000 to $30,000
– Towable trailer band mill – $20,000 to $50,000
– Hydraulic indexing mill – $30,000 to $60,000
– Fully hydraulic mill with automation features – $40,000 to $100,000+

Other common startup costs:

– Chainsaws, safety gear, tools – $2,000 to $5,000
– Down payment on logging equipment like skidder or tractor – $10,000 to $30,000
– Kiln drying equipment – $2,000 to $10,000
– Forklift or material handling equipment – $5,000 to $20,000
– Logging trucks, chippers, grinders (used) – $5,000 to $40,000 each
– Land with timber (if acquiring) – $100,000+
– Shop or sawmill building – $10,000 to $50,000
– Permits, licensing – $500 to $5,000
– Business formation, insurance – $2,000 to $10,000

In summary, total startup costs can range from about $20,000 to $100,000+ for a basic portable mill business up to an advanced production mill with additional logging, drying and material handling equipment. The mill itself can range from $3k to $100k+ depending on size and features.

What are the ongoing costs to operate a portable sawmill business?

Ongoing operational costs for a portable sawmill business can include:

– Raw material costs – Purchase of logs is often one of the biggest expenses. Prices range from $100 to $1000+ per thousand board feet.

– Equipment maintenance and repairs – Expect to budget $2,000 to $10,000 per year for mill maintenance costs.

– Fuel costs – For milling machinery as well as log loading/handling equipment and transport vehicles.

– Labor – Payroll for hiring sawyers and log handling workers. Can be $15 to $30/hour including benefits.

– Supplies – Blade sharpening services, replacement blades, lubricants, electricity, etc.

– Insurance – General liability and other business insurance fees.

– Facility expenses – If leasing shop or yard space.

– Transportation costs – Log trucking expenses, lumber delivery fees.

– Marketing – Website, advertising, promotional materials.

– Accounting, legal, consulting fees.

– Permitting, licensing, compliance costs.

– Property, inventory, other taxes.

For a small 1-2 person portable mill operation, total yearly operating costs often range from $25,000 to $100,000. Larger mills with several employees may have $200,000+ in annual expenses. Efficient operations are key to profitability.

Can you operate a portable sawmill business part-time?

Yes, many portable sawmill businesses operate on a part-time basis, especially when starting out. Here are some key factors to consider:

– Many owners have a full-time job and run their mill on nights and weekends. This provides income while limiting risk.

– Part-time mills generally have lower production volumes, often just a few thousand board feet per month.

– Costs can be kept relatively low with used equipment, minimal employees, and operating from home.

– Marketing is critical and needs to be targeted and efficient. Word-of-mouth referrals are helpful.

– Schedule management is crucial to prevent being overwhelmed if demand increases suddenly. Avoid committing to too much work.

– Have policies in place for order sizes, pricing, delivery, deposits, etc before starting.

– Consider specializing in high value wood products like slabs orspecific species to maximize income per board foot.

– Expand to full-time operations slowly over several years once demand is proven and operations are running smoothly.

– Hiring an employee or two can help expand workload once there is sufficient consistency in sales pipeline.

Is it feasible to operate a portable mill full-time?

Operating a full-time portable sawmill business is certainly possible but requires a substantial amount of work and efficient processes. Here are some tips:

– Production levels generally need to reach 10,000 board feet per month or more to generate enough income.

– Equipment needs to be robust and reliable to handle high-duty cycle operations. Automated features can help maximize production.

– Log supplies must be adequate and consistent to feed demands. This usually requires procuring logs from multiple sources.

– Administrative work like bookkeeping, marketing, equipment maintenance adds significantly to the workload. Hiring office help or contractors is recommended.

– Production planning is crucial to manage workflow and meet customer timelines. Inventory levels need to be monitored.

– Having some dried lumber in inventory helps buffer production gaps or fluctuations in log availability. Investing in a kiln is recommended.

– Expanding into specialty services like kiln drying lumber for other local mills or offering milling classes can increase revenue streams.

– At higher capacities, hiring multiple mill operators and log handling crew dramatically increases output allowing the owner to focus more on the business operations.

Overall, operating a full-time mill requires substantial effort but can be quite rewarding for owners who enjoy the nature of the business.

What factors most impact the profitability of a portable mill operation?

The key factors that typically have the largest impact on the profitability of portable sawmill businesses include:

Equipment Capabilities and Costs

– Production capacity – Board feet per day max cut capability.
– Automation features – Effects labor requirements.
– Durability and reliability – Impacts operating expenses.
– Equipment costs – Purchase price, maintenance, repairs, longevity.

Log Procurement and Costs

– Access to standing timber – Ability to cut own logs is ideal. Reduces costs.
– Log purchase costs – Significant portion of operating expenses.
– Proximity to log sources – Transportation costs.

Lumber Demand and Sales Prices

– Local market conditions – Competition impacts prices.
– Sales channels – Retail vs. wholesale.
– Lumber pricing – Price per board foot.
– Species and grades – Higher prices for desirable lumber.
– Customer relationships – Repeat business crucial.

Operating Efficiency

– Production rates – Board feet of lumber per day/week.
– Cost control – Careful spending on supplies, labor, etc.
– Equipment maintenance – Downtime and repair costs.
– Labor productivity – Get maximum output per worker.

Business Model

– Part-time vs full-time – Effects volume and costs.
– Retail vs. wholesale – Direct sales earn higher margins.
– Specialized vs commodity focus – Unique lumber warrants premium pricing.
– Customer base – Dominated by few accounts vs diversified.
– Production consistency – Steady optimized output ideal.

Carefully evaluating each of these key profit drivers can help mill operators determine the best opportunities to boost their profit margins.

Conclusion

Operating a portable sawmill business can certainly be profitable for some owners, especially those with access to their own timber. But it requires assessing local market demand, controlling costs, operating efficiently, and sound business management.

It is critical to match the size and capabilities of milling equipment to the available log supply and target production volumes. Costs must be carefully monitored and controlled. And maintaining quality lumber output and good customer relationships is crucial.

For owners with passion for milling and woodworking, a portable mill can be a rewarding small business. But creating a consistently profitable full-time venture requires significant effort and proficiency across equipment operations, log procurement, business administration, marketing, and customer service. Realistic planning matched with hard work and efficient processes is the key to success.