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You Do It Better! How Recreational Sawyers Can Beat Larger Competition
There are several ways small, recreational sawmill operations can manufacture forest products with higher quality for lower prices using Wood-Mizer sawmills.
By Jordan Baize
Date Posted: 12/1/2011
Jordan Baize is the General Manager of the award winning B & K Wood Products, LLC. in Madisonville, KY. He runs a Wood-Mizer LT300 and WM3500 as principle saws in his daily operation. His family has been in the lumber industry for the last 55 years. More information can be found at www.jordanbaize.com and www.bkwoodproducts.com.
People often assume that larger lumber companies can always manufacture products better, cheaper, and faster than their smaller, lesser-known competitors can. However, there are several ways that small, recreational sawmill operations–individuals or teams of individuals who manufacture wood products in their spare time and often do so without formal business organization – can manufacture
You can pick your products
Let’s face it: small sawmill operations cannot produce the amount of forest products that a large, industrialized company can. For instance, our company,
B & K Wood Products, produces nearly 600,000 board feet of lumber each week
using over 7,000 logs and almost 100 employees. Recreational sawyers can’t
manufacture railroad ties as fast as we can. That’s just how mass production works.
However, something else about mass production is that, by definition, practitioners cannot quickly change or alter their products to meet customer
needs. We can make a lot of standardized fence posts, but we cannot efficiently
cut a barn pattern or the material needed to piece together a back porch. And
that’s where you come in: you make the products that larger sawing operations
cannot efficiently do, which is custom sawed products. Remember that efficiency is time saved, and time is money; if you can produce a product like the lumber needed for constructing a gazebo more efficiently than the bigger guys, you can also do it cheaper. Advantage: you!
“As a recreational sawyer, you have the option... to grow or control your
growth as your profits allow.”
You can choose to grow or not
Something that larger companies often do poorly is grow. Big companies often have a tendency to think they are supposed to get bigger, like it is the natural progression of things. Society might say that it is the norm, but mature thinking would often advise against it.
Growth by a business that is not ready for it, cannot finance it internally, or cannot support it with its internal systems is simply bad business. As a recreational sawyer, you have the option simply not to grow or control your growth as your profits allow. That is how larger operations should usher in growth to their company but too often do not. It’s cheaper, more practical, and less stressful to “grow within your means.”
Think about it: right now, no one is pressuring you to meet payroll, pay huge equipment payments, or deal with the everyday headaches of operating your own large sawmilling operations; so enjoy the benefits of controlled growth.
Remember, slow and steady wins the race.
You can save in insurance costs
Worker’s compensation (WC) insurance is very expensive. For employees who do any sort of logging duties, WC rates effectively double the employer’s payroll cost for that employee. Employees who strictly perform sawmilling duties
still get an approximate 20% added to their employer payroll cost. Since most
recreational sawyers are either individuals or family teams (father/sons, brothers,
etc.), significant savings can be seen from WC insurance.
Worker’s compensation laws vary from state to state, but most states mandate that employers purchase WC insurance for their employees after they hire a certain number of employees. However, most states allow companies and individuals to forgo the purchasing of WC insurance if they have no employees. The answer? Make your employees owners. If you are a father and sawmill owner operating with your two sons, keep 80-90% of the ownership stake in your company and give 5-10% each to your two sons. You still have the vast majority of ownership stake in the company and ensure that your payroll costs are significantly lower because business owners, in most states, do not need WC insurance to protect themselves. Careful consideration and planning should be completed with the help of an accountant, but this option is one that works great for individuals and family teams and considerably reduces payroll costs, making you a more efficient producer.
“You make the products that larger sawing operations cannot efficiently do, which is custom sawed products. Advantage: YOU!”
You’re Not The Underdog
It is important you realize that you have advantages to your business that Georgia Pacific and Canfor simply do not, and cannot have. You can do some
things better than they can. The key is to know the maximum you can do within
your means, and do the best job at those things. Focus on smaller, custom projects, don’t grow faster than your finances will allow, and cut costs that are unneeded or premature. Recreationalists are great for their community and good for the industry, as well. Congratulations on your success thus far.
Watch Wood-Mizer’s new Business Spotlight Video Series to see how recreational sawyers are running profitable businesses with their sawmills.
Visit woodmizer.com to watch online or email firstname.lastname@example.org to request the free DVD.
Editor’s note: The preceding was a paid advertorial by Wood-Mizer.
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