How to open a sawmill from scratch
The demand for various sawn timber has remained very high for many years. So, this is due to the fact that the market for the construction of the private sector is constantly developing: country houses, summer cottages and additional buildings: baths, gazebos and others. The roofs of all these structures, and sometimes the walls, are erected from processed wood. Many entrepreneurs who enjoy working with wood try to enter this niche and take their "place in the sun" there, some succeed, and some do not. Let's take a closer look at how to open a sawmill from scratch, what you will need to buy and where to look for customers for finished products.
- high demand for processed wood
- the ability to start with small investments, and then expand the business
- high profitability
- usually trading in large volumes
- difficulty in finding reliable suppliers of round timber
- high electricity consumption during the operation of the units
- presence of seasonality
We have given the main pros and cons, now let's understand the basic steps for starting a business idea on a sawmill.
In order to work in a legal environment, you, as an entrepreneur, will need to issue all permits for a production line and for trade.
Here's what you need:
Place and premises
To establish the production process, you need to rent a room, preferably on the outskirts of the city, so you can save money. The main requirements are:
- the leased area should have several main premises: working area, warehouse, drying. Usually they are looking for hangars or large garages with an area of 100 sq. ... and a ceiling height of 4 m. This ceiling height is needed for the arrival and operation of equipment, the same loader.
The main advantages of a sawmill as a business in a crisis: -
- depreciating money must be invested. And potential consumers are investing them in construction, since premises are a reliable, liquid asset that only increases in price;
- land prices are falling during the recession. And your own business on a sawmill requires a plot of 15 acres;
- in the regions where forest plots are sold, the price for them is reduced. As a result, the owner of the sawmill can get raw materials for almost nothing.
How to properly organize your business
The easiest way to start your own business is to buy a ready-made business.
If you try to carry out all purchases and registrations (site, equipment, raw materials, electricity, permits) yourself, it will turn out to be much more expensive. One payment for connecting electricity can cost a million rubles. Companies organizing a turnkey business purchase its components in bulk, receiving volume discounts. In addition, you can miss the advantageous moment, dealing with the initial designs.
1. A plot of land with communications - in the first place, the supply of electricity. By purchasing non-electrified sites, the owner of the sawmill runs the risk of losing money. Using generators is wasteful and expensive. The price per one hundred square meters of land depends on the region and the characteristics of the area. On average, you can navigate for costs from 2 thousand rubles / weaving, that is, from 30 thousand rubles. In any case, the land can be sold if the business goes wrong.
2. Equipment. Sawmills. You can purchase a domestic unit "Taiga". Its cost on the market for equipment for sawmills is one of the minimum, from 200 thousand rubles (you can buy a used machine for the first time). Equipment made in Finland has good reviews. The quality of the product processing depends on the quality of the machine. And poorly processed boards are actually sold at the price of raw materials. Therefore, savings are not practical here.
The following types of sawmills are recommended for small businesses:
3. Carport, premises: equipment, warehouse and administrative. Warehouse and production areas should be built taking into account movements in the workshop: this will help to level the risk of injury and increase productivity. Special attention should be paid to the height of the premises: if the logs are loaded with a crane, it cannot be less than 5 meters. The minimum costs for awnings are from 200 thousand rubles.
4. Access roads - from 100 thousand rubles.
5. Utility costs, commercial expenses, consumables - at least 200 thousand rubles.
6. Wages can be piecework and depend on the amount of wood cut. It is recommended to pledge the amount at the initial stage of 200 thousand rubles.
Do you live in a wooded area and plan to do business? Then there is a great option for you - the sawmill as a business brings very good profits and pays off quickly, despite the rather serious initial investments. It is not difficult to organize such a business - the main thing is to carry out business planning correctly.
What should a sound business plan include? This document serves two purposes:
- Drawing up a "road map" of the business, a clear description of all stages of starting a new business. This plan will help you implement the project and create a coherent picture of further actions.
- Submits your idea to investors and lenders. It is on the basis of your business plan that they will make a decision about investing in the project.
When drawing up a business plan for a sawmill, the following points should be described:
- for what purpose a new business is being created;
- who are your direct competitors;
- where will it be located;
- what exactly will the sawmill produce;
- who will buy the raw materials;
- how long will it take to start the business;
- what equipment needs to be purchased, how many people to hire and what positions;
- how much investment is required to start the project;
- how quickly the investment will pay off, how much profit the project will bring;
- what are the prospects and risks of this business.
Analyzing the market
Any business must start with market and competitor analysis. This will help you to accurately determine the possibility of “entering” the industry of your choice, calculate the price level and overall profitability, understand who you will have to fight with and by what methods. The correct analysis is done from a general view of the woodworking market to a private consideration of your particular locality.
Market analysis is based on the following factors:
- Does this industry have any prospects.
- How many sawmills are already operating in your area.
- How much raw material is available.
- How easy it is to sell it at a reasonable price.
- How many people work in this industry.
- What is the average salary level.
- What is the threshold for entering the business, what is the profitability.
Additionally, we recommend that you study not only competitors, but also logistics in the region. Logging implies a rather complex logistics - first, the logs must be brought to the sawmill, then taken to the client. Remember that a sawmill as a business implies the availability of good roads and entrances, otherwise the cost of transportation can increase dramatically. Also, study the number of points of sale of finished products in the region and country, think about how you can enter into cooperation with them.
Please note: you need to establish an uninterrupted supply of raw materials, so the forest must be easily accessible. In most regions of Russia, logging and removal of timber presents a certain difficulty - this must be taken into account when choosing a location.
Various kinds of lumber have been in high demand in the market for many. The main reason for this trend is the dynamic development of construction, especially private houses, summer cottages and specialized buildings. Wooden materials are used for assembling roofs and walls of such buildings.
The sawmill business idea is attractive to both beginners and experienced entrepreneurs. However, not everyone is able to cope with such enterprises. We will analyze in more detail all aspects of the implementation of such a project from scratch, the features of costs and the search for clientele for finished products.
First, it is worth noting the main advantages of this business:
- high demand for processed wood;
- being able to start with little investment and gradually expand production;
- strong profitability;
- trade in products in large volumes.
However, the business idea of a sawmill has some drawbacks:
- it is quite difficult to find reliable partners for the supply of raw materials;
- significant energy costs when working with equipment;
- there is a factor of seasonality of sales.
Required investments at the initial stage, activities
To carry out legal activities in this area, you will need to obtain all the necessary permits for setting up production and conducting trade procedures.
Let's highlight the necessary steps to create a full-fledged enterprise:
- registration of an individual entrepreneur or LLC;
- registration of a certain number of employees;
- signing contracts with timber suppliers, or obtaining permission to process the site with our own resources;
- rent or purchase industrial premises;
- obtain a document authorizing work from the SES and the fire service.
One of the most important stages in the implementation of a sawmill business idea is renting or purchasing premises. Here you can save money by purchasing them on the outskirts of the city. There are a number of requirements for such production facilities:
- the presence of several main buildings: work area, dryer, storage room. In most cases, hangars or garages with a large area and high ceilings are used, which is due to the need to use special equipment;
- summing up a high power transmission line;
- convenient access to production, allowing vehicles and their maneuvers;
- compliance with all fire safety rules.
Due to the decline in prices for land plots, there is an increased interest in the construction of private cottages. With any technology for building houses, wood materials are used. Consequently, the sawmill is a profitable and sought-after business. In order to assess the advantages of this enterprise, it is necessary to draw up a business plan for the sawmill and get acquainted with the features of production.
Sawmill as a business
Any business should be opened after a thorough analysis of the market, studying the details and subtleties. A budding entrepreneur should start planning with a budget sawmill. This will save initial capital and quickly eliminate errors that may arise in the first years of operation.
We have some more interesting business ideas for the village:
According to the regulations, a wood processing enterprise must be located at least 100 meters from the residential area, since the production is accompanied by a lot of noise. An ideal place to build a sawmill will be a forest on the outskirts of the city. Some machines require water to operate, so communications must be in close proximity. Small production can be located on a plot of about 1000 sq.
Placing a sawn timber business will require production space. They are required for storage:
- Finished products;
- Raw materials;
- Material sold before shipment.
Equipment and personnel
The main expense item when opening a sawmill is the purchase of machines for woodworking and the production of boards. To operate a small sawmill with a capacity of 1000 cubic meters, you need to buy: