question about output

[STLfirewood]

I have a friend that can get a contract for me. He works at a pipe company. When they ship their pipe they use pieces of oak to fit between them. He told me I could cut their boards for them. The boards are 3"x4"x8'. They pay $3.20 a piece. They order 1600 at a time. I have access the he logs. I have been doing a little logging and I can get the logs. I have yet to use my Woodmizer LT15. Is this to much to expect for this little mill. They use 2 maybe 3 shipments a year. I really don;t know what to expect out of my mill.

hanks Scott

 

[BobL]

You need to do a full budget

Have you done the sums to work out how long this will take and if it is worth it in $$ terms? If you do a complete budget (time and money) including, running costs, service, repairs, parts, your time, and then you can work out if this will leave you enough money for a replacement within a reasonable time.

Assuming the log has no defects a 24" diam log will give you ~ 20 pieces
- thats a minimum of 11 cuts per log
- how long will it take you to do that (don't forget to include setup and possible stoppages etc)
- thats 80 logs to place the 1600 piece order
- running costs, blades, fuel, service, parts etc
- your time - give it a reasonable value rating per hour

If after all this you can make 50c real profit on each piece, after 8 orders you can buy a new mill! So the question then becomes - can it cut 11200 pieces or 6160 cuts - I would think it could do this quite easily.

BTW if you walk 3 yards up and back for every 6160 cuts you will have walked 21 miles - so maybe factor in a new pair of boots!

 

[BIG JAKE]

Not much more than a 2X4. 5440 one load, 2 @10,880.00 etc, and then the feds/state will take more than 1/3 of that. You'll need to write off anything you can to keep more of your money-gas, oil, truck maintenance, saws, meals, everything including mileage. With todays economy you do what you can, but it's a lot of work too. What you could do is do a trial run and see how much time it takes versus output-easier for you to see if it's enough money for you for work involved. Leave your slabs 3X8" in case you decide this ain't what you want to do. All depends on how much per hour you net.

 

[redprospector]

That's about 40 cents per board foot.
I usually get more than that for Pine. I turned down a contract for .43 a bd ft, but if the economy dosen't pick up some, I may wish I hadn't.

I've never ran a LT15, but I did run a LT30 for a while. No hydraulics on the bed, just the power feed and head lift. If I got 1000 bd ft in a day, I had a pretty good day and no one had to rock me to sleep that night. That's 125 of those 3x4x8' boards a day. In reality you could probably expect to cut between 90 & 100 peices in a day (750 to 800 bd ft a day) if you're working by yourself. At 90 peices a day that would bring in $288.00 a day, but you haven't paid yourself for getting the log's yet.

Andy

 

[STLfirewood]

Thanks for the replies. I have been picking up a decent amount of small logging jobs. I have one coming up that is 22 acres and it has (I think) 10,000 plus feet of grade white oak. After the grade log is taken there will be a lot of saw logs left. The grade is paying $1 a bft right now. If I turn the saw logs into 3x4s I can make more money on them. I'm self employed and it could be something I could do on my rain days. I don't have to supply all of them just what I want to. Again thanks for all the replies.

Scott

 

[Mike Van]

I know the pipe company is trying to squeeze every $$$ they can, but boy, 40 cents a foot [3x4x96 = 8 bf into 3.20 = .40/ft] is really cheep. People drop logs of here to be sawn, I get 35 cents/ft, just for sawing. Could I get oak for 5 cents a foot in the log? No way, not in this day & age. Also Scott, not every log will yeild useable 3x4's, some will warp & twist as they're being sawn, some will have ant farms or other defects. Just me, but I'd firewood that oak before I'd sell it for 40 cents.

 

[Booma]

Have you done the sums to work out how long this will take and if it is worth it in $$ terms? If you do a complete budget (time and money) including, running costs, service, repairs, parts, your time, and then you can work out if this will leave you enough money for a replacement within a reasonable time.

Assuming the log has no defects a 24" diam log will give you ~ 20 pieces
- thats a minimum of 11 cuts per log
- how long will it take you to do that (don't forget to include setup and possible stoppages etc)
- thats 80 logs to place the 1600 piece order
- running costs, blades, fuel, service, parts etc
- your time - give it a reasonable value rating per hour

If after all this you can make 50c real profit on each piece, after 8 orders you can buy a new mill! So the question then becomes - can it cut 11200 pieces or 6160 cuts - I would think it could do this quite easily.

BTW if you walk 3 yards up and back for every 6160 cuts you will have walked 21 miles - so maybe factor in a new pair of boots!

Wow BobL...you sound like an accountant! I think accountants are really cool!!!

Another helpful hint if you are a small business; take advantage of section 179 of the IRS tax code. It allows you to fully deduct the cost of equipment purchased in the tax year instead of depreciating it over several years. If you have an accountant keep your books, ask him/her about it. If you do your own bookkeeping, there are some really good resources on the net that tell you all about it http://www.section179.org/

This one even has an calculator that estimates the savings from utilizing section 179. Just put in the cost of your equipment and hit 'calculate'

http://www.section179.org/section_179_calculator.html

According to this calculator, utilizing the section 179 deduction on a $5000 investment in equipment during the tax year would yield a $1750 tax savings, assuming you fall in the 35% tax bracket. This is a lofty figure as most of us don't fall into that bracket and you would have to reduce it by the tax savings that you would get *anyway* from regular depreciation. The bottom line is that there *is* a benefit to be had if you purchased equipment for your business during the tax year.

 

[BobL]

Wow BobL...you sound like an accountant! I think accountants are really cool!!!

Sorry to disappoint you but my day job is in science, but we still have to budget and make ends meet. I didn't use the "Depreciation" term because like to keep things as simple as possible.

 

[Booma]

Sorry to disappoint you but my day job is in science, but we still have to budget and make ends meet. I didn't use the "Depreciation" term because like to keep things as simple as possible.

No disappointment here heh, heh! I kinda figured you weren't an accountant because of all the neat stuff you build and your CAD additiction. If you'd been posting diagrams in Excel spreadsheets, I might have been a little more surprised.

I didn't mean to sound complicated in the post about the tax code. Just wanted to point out a tax savings opportunity for business owners who may not be aware of it. A few minutes of reading and research could lead to a few extra bucks staying in their pocket.

 

[hermit]

Hey Booma, What part of Arkansas you in ? I am about 30 mi south of Branson, Mo on the head of Buffalo National river, near Compton AR.

 

[Booma]

Hey Booma, What part of Arkansas you in ? I am about 30 mi south of Branson, Mo on the head of Buffalo National river, near Compton AR.

Hi Hermit,

I live in Searcy, roughly an hour northeast of Little Rock, but I have a cabin and some acreage near Mt. Pleasant which is a little closer to your neck of the woods. I think the terrain is similar, steep and rocky! Tough to pack out whatever lumber and firewood you saw up but I enjoy it a lot. There have been many occasions for enjoyment over the past few months with all the ice we had up that way eh?