A sawmill or timber mill is a facility where logs are cut into timber. Logs refers to the tree after it has been cut down and timber is the logs after it has been cut into a marketable size for reselling. A sawmill cuts tree logs into timber that can be used in furniture, construction and other applications. This business basically makes planks from logs and resells it.

Getting Started
To start this business you need machinery to cut the logs into timber like a breakdown bandsaw with log carriage. Then you need space to put the machine and store both the logs and the cut timber. Not only is the size of this space important but so is its location. You want to be as close as possible to a source of logs i.e. where the trees are grown. Yes, there are sawmills in industrial warehouses, but you often see them on smallholdings as well. In fact I’ve been to a farm where the main source of income was the sawmill and the trees was just grown down the road.

Sawmill Operation 101

Sawmill Operation 101

Right now, I’m milling lumber from last year into 4-quarter boards which is 1 inch thick boards. I’m milling enough of that until I get enough wood to use for flooring for the house and then I’m going to move on to thicker pieces for furniture, doors and things like that.

Here is an example of a small manual sawmill machine:

The Affordable, Easy-to-Use & Reliable Sawmill You’ve Been Looking For – The Frontier OS27

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Here is an example of a larger, more advanced sawmill:

Four sided reducing – bandsaw breakdown

Modern sawmill with high recovery technology from Söderhamn Eriksson. For more information, visit www.usnr.com.

Example of a small sawmill operation:

Made $1,000 in ONE DAY! (Milling Lumber on Sawmill)

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Business Model
The business model is fairly straightforward; you buy the logs from a farmer who grows trees, or from people that have agreements with farmers to cut their trees. The logs gets transported to your facility where it is processed (fed through the breakdown bandsaw) and turned into timber that is then resold and delivered to companies that will use that timber to make furniture or build structures.

To be clear this is a manufacturing business, and it does not grow the trees (farming) and does not sell direct to public (retail).

Target Market
The most popular route to take is to either sell to retailers or manufacturers. When I say retailers I’m talking about hardware stores that will resell the timber to the public or to other companies/builders. When I say manufacturers I’m speaking about people that will use the timber to make something with like furniture. Rarely do sawmills sell individual pieces directly to the public as it is a different business model (retail) to the processing of the logs (manufacturing). There are advantages and disadvantages to both, selling directly will make you more profit, as you have to give resellers like hardware stores wholesale pricing. But then you have to deal with individual clients which will add to your workload. But like I have said you don’t have to sell to resellers who have retail outlets you can also sell directly to the people who will use the timber providing they are large enough: a large bed manufacturer for example.

The business model you go with depends on where you are currently at, your circumstances, your location, your capital etc.

Products
If you are familiar with the timber industry or have been to places like Builders Warehouse you will know that timber is sold in various sizes. For example in structural timber you have battens, tilting battens, framing and wall plate, roof purlins, ceiling battens etc. Then you get other types of timber, like boards as well. Again, your product mix depends on your circumstances, types of machines, what do buyers want etc.

Examples of timber used in roof

Examples of timber used in roof

Resources
Business Model Manufacturing
Equipment Breakdown bandsaw with log carriage or related machine
Material Logs
Industry Timber, Construction, Furniture Making

Image credits: multisaw-sawmilling, Jim Derby,  Bill Bradley


You have a business idea, where to next?
How to Start a Business from Business Idea