Replies

1. 
   GHR | Oct 11, 2003 03:28am | #1

   You might ask your father-in-law what he thinks.

   Myself, $75k is too much to put up to start a business.

2. 
   forestgirl | Oct 11, 2003 05:43am | #2

   For the superbly business-minded in this forum, you might want to break down that $75K into categories (land, building, milling machines, other), and provide info on how you'll obtain the lumber and how much it'll cost.  I'm mildly-business minded, and the first question that comes to mind is:  What is your marketing strategy?  You'll need a good one to get your sales levels up pretty quickly. 

   forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl   ;-)

1. 
   rodknee | Oct 12, 2003 01:28am | #5

   Ok heres the breakdown....

   $20,500 --------------Molder

   $7,000 ---------32'x 48' steel building

   $20,000 ----------- Land (an estimation for the lots of land in this area) and I may even get away with putting it on some of my family's property for a while to cut costs..

   $10,000 ------------Startup lumber ( chestnut only )  I tried to figure out how much finished flooring I would need to have in order to turn out a gross of $20,000.  What I came up with is that I'll need to sell about 3335/sqft @$6.00/sqft in order to get to the $20,000 gross with about $7,000 being my cost for the lumber.  So I just rounded it up to $10k to be safe. Now in addition to buying from Father in law I will be finding the buildings around my area, which I have been doing for about two months now and getting a small surplus of lumber of my own.

   $4,600---------------Dehumidification kiln kit from wood mizer ( but like someone else pointed out I could just pay someone else to do it for me untill I get on my feet. The man around here charges about $225 per 1000/bf.)

   $200.00-----------a moisture meter but if i am going to get some else to kiln it for me do I need one of these now?

   $500.00-$1000.00------------A good Table saw to rip bords for flooring.

   $12,250----------------a straight line rip saw-WHICH I have rethought and decided that this is something I do not need right away if i get a nice table saw.  I hate to even admit that I would consider paying that much for a saw.

   So there ya have it all that there adds to about $75k, but since reading your posts I have rethought some of this stuff and decided that if i can get by without the kiln, ripsaw, moisture meter and if I could get away with setting the building up on my uncles land for a few years, that should cut my startup cost to about $40,000. That sounds better.

   Now as for marketing I have been giving this think, you all have to realize I have only started planning and researching now for about two weeks in between my day job and the side job of getting old buildings to take down that is why I have turned to you all for a little advice.   so for marketing heres what i Have been thinking

   Internet web site , We have numerous regional "weekly trading" papers where you can place free ads, classified section of newspapers, getting some business cards and flyers made up to post at Lowes, home depot, and various other stores.   In addition to local adverts I would call up different cities chamber of commerce thorughout the us and get the number to their "weekly trader" and placing my ad in those publications.  In addition to all of that I have a good friend who is in marketing and I will ask some advice from him.

1. 
   migraine | Oct 12, 2003 02:52am | #8

   I guess you are going to feed your family & heat your home on saw dust while living in that metal building???  Insurance???

   Need to consider having 1-2 years income put away.

3. 
   dondownunder | Oct 11, 2003 12:00pm | #3

   rodknee

   Before you commit 75 grand do a strategic plan & most of your questions will be answered. The research will also give you a good grasp of the industry and may also provide alternatives that see the business go a lot further. More info & assistance  can usually be obtained from your local business enterprise centre.

   Don  

4. 
   rslatm | Oct 11, 2003 05:24pm | #4

   Sure, it's doable but what's your business background and how well do you know the wood business? You should work with your father in law to learn about the business. You should also contact your local Small Business Administration in help to put together a business plan that gets specific. FG is right about marketing. I work in the antique lumber business and there's a lot more to it than most imagine. We sell heart pine, pickle vat oak, chestnut as well as underwater salvaged lumber such as larch. You can start small but eventually you'll need a bandmill, moulder, dry kiln (we still send our wood out to dry and should have a kiln soon). So when the chestnut runs out guys will be selling antique OSB and particle board. The marketing is a big part.
1. 
   rodknee | Oct 12, 2003 01:33am | #6

   What is your marketing strategy Rick, or rather what was it when you first entered the business?  And how much business background did you have when you started as well?

   Thanks Rodney

   PS I am already getting a head start on the antique OSB....

2. 
   rodknee | Oct 12, 2003 02:08am | #7

   another question Rick.  What kind of molder did you start with I am still kinda of shopping around on those, any you can recommend?  I would like to look into buying a used one but I would also be afraid of any underlying problems with it... Wood Mizer has a 5 spindle molder for $20500.

   Thanks again, rodney

1. 
   rslatm | Oct 12, 2003 09:48pm | #10

   I didn't start the business. I'm one of 20 employees. I do purchasing, research and keep the equipment running. We have a Wadkin 12" moulder worth $125,000. I know a guy who does flooring with a four sided planer. A straight line rip is essential for flooring or a big jointer and regular saw but it's slow.

   Weinig is good name in moulders and good used ones are available. We started with a double spindle shaper and I would not recommend that route. Taking down buildings is not a good way to go...liabilty issues. There's plenty of recycled wood brokers out there. Yes...get the moisture meter!!!!! It's a steep learning curve. The cost of the kiln isn't taking into consideration the the kiln itself or wiring. Three phase power available? Also metal detectors...lots of nails in old wood! What... No bandmill in the budget! Most folks don't like running old beams in their sawmills. Don't forget the forklift! We use a standard type and a sideloader to access the storage aisles.

   Edited 10/12/2003 3:55:12 PM ET by Rick at Arch. Timber and Millwork

5. 
   10fingers | Oct 12, 2003 07:43pm | #9

   Hello,

   I have had about 20 years running different companies and making a profit and have a MBA also.  Several things you could do on a excell program spreadsheet:

   Put in all costs and payments.  Include taxes, workman's comp, fica, etc. for employees.   Consider the alternative of leasing equiptment.

   Determine how much work each person could produce  and the time required at each level of production (cutting trees, hauling trees, sawmill work, milling, packaging, shipping, office work, etc.)  Decide how much each employee will be paid.

   Put together "what if" levels of production including costs at each level to determine how much $ will come in.   You will have a minimum cost each month even if you do not produce or sell anything.  

   Decide if you can meet the break even point and still want to get into this line of work.  Many small business fail because they didn't consider what the true cost of running a business would be.   I am not trying to scare you off, just give you a few ideas of what to look at.

   Chuck