Can you Make $1,000,000 a Year in the Sawmill Business?

 

As is the case with any business, people like to ask if it’s possible to make $1,000,000 per year in the sawmill business. It’s true that owning a sawmill can be a very lucrative business venture, and in the right circumstances it is not only possible but very likely to earn you a significant profit on a regular basis.

However, it’s worth keeping in mind that building a business with only profit in mind is not sustainable in the long term. There will be highs and lows in any business, and if profit is the only objective then owners will be unable to be satisfied with their work during those low moments.

Owning a sawmill can be a big earner, but it takes a lot of work to operate to its fullest capacity. For many, getting into the sawmill and woodworking business is a labor of love, and those are the people who are most likely to make a significant amount of money because the enjoyment of the work will be there, which prevents burnout and allows them to develop the business to its full potential.

 

Tricks of the Trade

 

Earning $1,000,000 per year in the sawmill business is more than just a matter of enjoying the work. To succeed in any business, you need to go into it with the right plan and objectives. Take a look at the following tips to ensure that you give yourself the best chance of success before you jump headfirst into the woodworking and sawmill business.

 

1. The Value of your Tools

 

As anyone who works with wood will tell you, one of the most important things to invest in is your tools. When it comes to sawmills, there are several high-quality options available, but many experts agree that the gold standard of milling lumber is Woodmizer.

Woodmizer makes some of the most popular sawmills out there, and for good reason. These mills are some of the best products on the market and they require relatively little maintenance as long as you take care of them along the way, similar to any other tool or machine.

 

1. Cost vs Production

 

Sawmills can be expensive, but there are ways to help offset the costs that can help your sawmill business become profitable sooner than it would be otherwise. Just like buying a vehicle, you can save a reasonable amount of money by purchasing a quality sawmill used instead of brand new.

Unlike vehicles, however, which only depreciate in value the moment you purchase one, a sawmill is a tool at its core and will make you money in the short and long term. A brand new, high-quality mill can cost anywhere from $20,000 – $50,000, whereas a used sawmill can be significantly lower, often from $15,000 – $20,000.

If you purchased your sawmill brand new, it is worth setting aside anywhere from $1000 – $1500 just for maintenance costs annually, though you should budget about double that amount if you purchased used. If the sawmill was taken care of properly, you may not need that entire amount for maintenance, but it is worth factoring those costs into your overall price to ensure you budget properly for success while determining the needs of your particular machine.

 

 

Separate from the maintenance costs, you should also budget the cost of your blades. The most common type of mill uses a bandsaw blade, which costs approximately $20 – $30 per blade. If you don’t run into nails, staples, or other metal obstructions in the wood, and you manage your lubrication and feed speeds properly, you should be able to realistically cut around 400 – 500 board feet per blade.

 

While the cost of blades is not the most significant cost associated with owning a sawmill, it is vital to keep it in mind as you develop your business. Try to estimate how many board feet you are trying to put out on a monthly basis, divide that number by 400 – 500, and you will work out your rough cost of blades on a monthly or annual basis.

 

The last important element to remember for this rule is the cost of kiln drying your lumber. While the individual costs of drying wood can be as low as $0.15 per board foot, it is more likely to be around $0.50 per board foot, and although that may seem low, it adds up quickly if you are turning a large amount of lumber on a regular basis.

 

1. Getting Logs

 

Out of all the costs associated with owning a sawmill, acquiring logs is easily one of the most variable ones. Not only does the price of individual types of wood vary wildly, but the quality of the logs you get will also be all over the place. If you are fortunate, you may be able to get a fresh log from someone who has just taken it down, but in many cases people hold onto their products for far too long, letting the elements affect them adversely and significantly damaging their potential. 

 

Remember that haggling is a very viable option, especially when it comes to buying logs. There are very few prices set in stone when it comes to buying and selling logs, so train your eyes to look for quality, and only buy lumber that is going to be worth your time to mill. After all, with the costs of blades and maintenance listed above, you want to avoid milling any lumber that you won’t be able to turn around and sell afterward.

 

How to Make your Money

 

The sawmill business is not that different from other businesses when you break it down. The largest difference is simply the amount of labor involved. If you have a one-man operation, even if you have the best machinery in the world, you will only be able to turn a certain amount of product per year, and once you subtract all your costs from the potential profit you might earn it will likely fall short of the $1,000,000 per year mentioned above. 

 

However, that doesn’t mean that you can’t scale it to that level. Every business in the world requires investment, assessment, and refinement. You will likely be able to make your sawmill business profitable quickly as long as you factor in the aspects discussed in this article, and as you develop your business you will find ways to increase your profit and decrease your operating costs. 

 

Remember that you will need to reinvest a large portion of your profits back into the business. You will want to maintain a revolving door of purchasing logs and selling lumber constantly. Fortunately, the cost of actually operating a sawmill is reasonably cheap. It only takes around five gallons of gas to run a sawmill for an entire day, and most of the costs are in the upfront purchase and replacement blades. 

 

The Bottom Line

 

Ultimately, if you are just starting out your sawmill business, you will not be making $1,000,000 per year. However, if you are passionate about your work, if you are willing to bargain where you can, and if you aren’t afraid of physical labor, you will undoubtedly be able to make a profitable sawmill business for yourself, and with time and dedication, you can certainly scale it up to that goal.

 

A million-dollar sawmill business requires people, and if you invest in the people you hire as much as you invest in your machinery and materials, you will be able to develop the necessary components to get yourself there. There are no instantaneous ways to get there, so remember to be patient, be smart, and be ready for any and all opportunities that come your way.