Sawing Education

How much do I charge?

There are no limits to the different approaches you can use to charge for your cutting services. The three most common methods are to charge by the hour, by the board foot, or by sharing the finished lumber. All three have their place, but the key is to anticipate which method would be the best pricing policy for that specific job. This will be easier to assess as you are exposed to more and more cutting situations.
         
By the Hour   By the Board Foot    On a share basis 
The most stable or secure method for pricing for the mill owner is a flat, hourly rate. Rates vary from location to location and range from $30-$75/ hour plus extra charges for travel, broken blades, etc.

Pricing on an hourly basis transfers all of the risk of daily output to the customer. It encourages the customer to have his logs clean and easily accessible, and to provide a person to help handle the materials to get the most value for his money. Depending on the situation, however, the customer may feel he did not get a “good deal.”		   Cutting by the board foot is the most common method used in the industry. This pricing method gives you the ability to make the greatest return in a day, but potentially exposes you to the lowest returns as well.

This pricing method places all of the risk of productivity on the sawyer since the customer is only paying for the lumber he receives. That is why this method is preferred by a great number of businesses in the industry. Set charges for broken blades, cleaning muddy logs, travel, etc. can be set beforehand.		   One of the most lucrative approaches to charging for custom cutting can be to accept a percentage of the finished lumber from the owner of the logs.

In most circumstances, this pricing method is advantageous to both you and the customer. With this pricing method, the customer doesn’t need to pay any money up front to have his lumber cut. The mill owner, in many cases, can get significantly more money by selling a portion of the lumber on the open market. Generally, the percentage of shares varies with the species cut.
         
It’s the Little Things that Count

Most of the customers that share their success and “horror” stories about starting their custom cutting businesses wish they had known many of the little things that make them successful today, but that they completely overlooked when they were new in the business.

1) Clearly define in advance the cost to a customer when an embedded foreign object (i.e., nail, fence wire, etc.) is hit while cutting a log. This will give you the money to cover the damaged blade and make the customer aware of potential additional charges. Common charges for damaging a blade range from $10-$30*. This charge can vary depending on whether a blade is completely destroyed or just requires sharpening.

2) Explain to the customer in advance any charges he will be assessed in addition to volumerate charges.

EXAMPLE: A customer may want you to cut a 38" diameter log. You need an hour to trim it with a chain saw to the mill’s 36" capacity, thus significantly decreasing your productivity. Hitting a railroad spike in a log may result in a loss of one-half hour of production time to remove the blade that is jammed into a cut. Both of these occurrences are examples of things that a customer should be expected to pay in addition to any broken blades since they are the responsibility of the log owner.

3) Set an hourly surcharge for cleaning muddy or rock-embedded logs.

4) Establish a mileage charge if the cutting site is beyond a specified distance from your location.

5) Charge a small setup fee (ranging from $5-$25*) for each time the mill must be moved at a particular cutting site.

6) Consider requiring the owner of the logs to supply a person to help off-bear. (Many owners prefer to be there or have an associate there while logs are being cut anyway.) Contact other sawyers in your area for competitive prices. Being aware of some of these small details will not only allow you to generate more income, but also help you avoid awkward situations with customers that could damage your reputation.
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