How to open a sawmill: a detailed guide to organizing a business

In this article, we will tell you how to open a sawmill and properly organize a woodworking business. We will give advice on drawing up a business plan, market analysis and developing a business marketing plan. Consider the methods of marketing finished products and financial issues.

First step

Before drawing up a business plan, you need to clarify some points.

What is the purpose of the company.
Is there any in the region and in what quantity.
Is there a ban on deforestation?
What prices do competitors adhere to and what kind of wood is used.

It may seem that the goal is clear - making a profit. But now we are talking about something else. For example, does the enterprise open as a sole source of income, or is it a business that complements the main activity: for example, the production of furniture?

The presence of competitors should not scare away. The main thing is that in the chosen region there is a demand for products and affordable wood.

In order not to burn out at the start, you need to immediately make sure that there is no ban on deforestation in the region and such a bill is not being prepared.

You need to know the pricing policy of competitors in order to offer customers more favorable terms of cooperation.

What to include in a business plan

When creating a business plan for a sawmill, it is necessary to describe in detail the following important points:

business purpose
products that will be produced by the sawmill
where to get raw materials for production
what equipment to buy
what professionals to hire
where is the company located
how much to invest
how quickly the investment will pay off
what are the risks of such a business
who will buy the finished product

These points should be described in as much detail as possible in order to get a complete and clear picture of the future prospects of the enterprise.

Market analysis

Before you start organizing a business, you need to conduct a thorough market analysis. You need to pay attention to:

sawmill prospects in the selected region;
availability of raw materials;
the number of competitors (direct, indirect);
sales market;
target audience.

Still it is necessary to estimate stocks of timber in the region. Understand who can become a regular customer and buyer of finished products. Find out what salaries competitors offer to their employees and how much people generally earn in the selected city or village.

It is also necessary to analyze the real estate market of the region in order to buy a plot or a building at an affordable price. There is also always a chance to acquire a certain area of forest for subsequent felling and obtaining raw materials. But this increases the amount of initial investment, making it unbearable for some. Therefore, it will be more profitable to cooperate with local forestries.

Marketing plan

The marketing plan should contain a list of products that are planned to be released. It could be:

clapboard
moldings
Facing bars
Wet and dry boards
Rounded and rafter logs

When creating a plan, you need to understand which businesses and entrepreneurs need these materials. For example, those involved in the construction of country houses and baths need such products. Or transport companies that need wooden pallets.

In the marketing plan, it is necessary to prescribe the methods and principles for promoting the sawmill: local and specialized media, the Internet, advertising on billboards, transport, etc.

Registration of a sawmill

A small sawmill can be run by an individual entrepreneur. Therefore, if production on an industrial scale is not planned, then it will be enough to register an IP.

It is advisable to register a large enterprise as a Limited Liability Company. This will allow us to work with large companies on a long-term basis and supply large batches of finished products.

Industrial enterprises, furniture factories, construction companies are more willing to work and trust LLC more than individual entrepreneurs.

When registering a sawmill with the Federal Tax Service, you must specify code 20.1.

An LLC must have a Charter and an authorized capital of at least 10,000 rubles.

During the registration process, you need to register with the Federal Tax Service and the Pension Fund.

Also, for the implementation of activities, you will need to collect the following documents:

Lease agreement or ownership of the plot.
The act of conducting an inspection by the State Fire Supervision Authority.
Agreement with the forestry.
Land plan.
Contract for the supply of raw materials.

After registering with the Federal Tax Service, you need to open a current account. This can be done at any bank: public or private.

Place for sawmill

The minimum area for a sawmill is 30 acres.

When choosing a site, you should pay attention to the convenience of access roads. Long timber trucks should easily drive up to production or loading and unloading buildings.

When building a sawmill building, it is worth remembering that it should be zoned to:

manufacturing facility
storage warehouse for raw materials
warehouse for storage of finished products
loading and unloading area
cloakroom and dining room for staff
bathroom: toilet and shower

The premises must be connected to an electrical network capable of withstanding high loads.

You also need to take care of the availability of fire extinguishing equipment and fire alarms. Do not forget about high-quality ventilation of industrial and administrative premises.

Equipment for sawmill

The number of equipment depends on the products produced. The minimum set for a small sawmill looks like this:

tape machine
disk machine
frame machine
gang saw
hand saws
edge cutting machine
wood drying chamber
saw grinder
waste press
forklift.

It is worth taking care of the delivery of finished products to customers. This will require at least one truck.

Employees and workers

The staff of modern sawmills is:

Head - the individual entrepreneur himself or the founder of the LLC can act.
Accountant.
Sales and Customer Relations Manager.
Sales representative for finding new customers and product presentation.
Sawmill foreman.
Machine operators.
Framers.
Storekeeper.
Locksmiths.
Truck and forklift drivers.
Cleaners and security guards.
Handymen.

For the competent operation of the sawmill, it is necessary to hire about 15 workers. In the future, with the expansion of the business, new specialists will be needed.

Sales market for finished products

When all organizational issues are resolved, you need to take care of customers. They may be:

building materials stores
construction companies building country houses
factories for the production of furniture, doors, windows
bases and wholesale warehouses of building materials
hypermarkets
private developers
individuals: farmers, summer residents, etc.

Product promotion and customer acquisition

As soon as production is launched, you need to create an official website for the sawmill. On its pages, it is necessary to demonstrate finished products, place contacts, information about cooperation and promotions.

In order for the site to be seen by more people, it should be added to online directories, launched and found by the target audience in social networks.

Each region has media - TV, radio, newspapers. There are even specialized publications. It is worth using these tools to promote the sawmill.

You can also attract the attention of the target audience with the help of advertising on billboards along the roads, next to hardware stores and directly to the sawmill itself.

Trucks that deliver finished products should also participate in advertising. It is enough to place a logo, the name of the company and briefly list what it produces on the sides and doors. There must be a phone number.

Do not ignore the cold. They can be sent to the email addresses of potential customers.

To effectively promote the sawmill, you need to use all marketing tools. For these purposes, it is better to hire an experienced marketer.

The financial side of the issue

The main item of expenditure is the purchase of equipment. It is about 2,000,000 rubles. This is taking into account that the equipment is new, not used. It is not recommended to buy old machines, because then they will cost more to maintain.

If you manage to find a room in a suitable place, then its rent will cost about 100,000 rubles. per month.

Repair of premises - workshop, office, household - will cost 250,000 rubles.

Before starting production, the equipment must be set up. Start-up and adjustment works will cost 25,000 rubles.

As a result, it turns out that in order to open a sawmill from scratch, you need to have an amount of about 2,500,0000 rubles. And almost 1,000,000 rubles. You may also need to buy transport.

All investments in the business will pay off in 12 months. Profitability - 70%.