The constantly growing volumes of construction make the issue of building materials relevant, among which lumber is not the last.
Therefore, the sawmill business idea is constantly put into practice by many entrepreneurs.
What is attractive about this business idea?
And indeed, even at first glance, the profitability of sawing wood seems to be quite solid.
After all, finished lumber is sold at a price almost three times higher than the price of raw materials.
However, more than half of the sawmills are closed due to low profitability, while the rest operate at a profit.
Why is there such a difference in results?
The fact is that, to open a sawmill, as well as to open any other enterprise, accurate calculations, market research and a good business plan are required. You can not base your business on approximate calculations and estimates.
First of all, you need to study the demand for finished products, the level of competition and sources of raw materials.
It does not make any sense to place a sawmill in a region that does not have forest resources. Otherwise, you will have to carry logs from afar, increasing the cost of raw materials.
What determines the profitability of a sawmill?
Existing prices for sawn timber make it possible to make a profitable sawmill, the volume of finished products of which exceeds 500 cubic meters per month.
This means, firstly, that you need to be able to get at least 700 cubic meters of logs to the sawmill every month, since about 30% will go to waste. And, secondly, it is necessary to be able to sell these 500 cubic meters of finished products.
Therefore, it is so important to first study the market and evaluate your place in it.
It should be noted that sawmill equipment is quite expensive. In addition to the sawmill itself, you will need to purchase drying equipment, which costs even more than sawing machines.
After all, it is dried products that are in demand, and not raw ones, since raw materials inevitably «lead» in the drying process.
What should be taken into account when implementing a project?
And for a more complete use of raw materials, pressing equipment will also be required for the production, say, of capsules from sawdust, or cat litter.
In addition, to open a sawmill, it is necessary to seriously prepare the area by equipping access roads and storage areas for raw materials and finished products.
All this makes investments in opening a sawmill quite serious, often requiring loans. And servicing the loan increases the economic burden and reduces profitability.
Therefore, accurate preliminary calculations and a detailed business plan become a key success factor for the implementation of a sawmill business idea.