Log sales what % goes to the black economy

[gensetsteve]

I would agree with most of that. I would say from experience I get 1.5 - 1.6 cu metres of loose logs form green hard wood even less from oak. I would say to earn £25 per hour is realistic any less and those little extras we forget start to erode it away as Dave Martin points out. I would also say you can scale it up if you wanted to by using more efficient machines ie you should be able to do a 40 hour week with out killing your body with the right kit. so processing 16 cu a day then a day to deliver means 1 cu an hour. 40 cu a week = £1000 45 weeks = 45k a year = 1200 tonnes of timber or full time logging

 

Hmmmm... an interesting thread this, and good to be on a forum where folks are disagreeing sensibly instead of the usual mud-slinging I see elsewhere. A very pleasant change.

 

Anyway... I think this is coming down to a conversation on overheads and wanted to take a moment to think about those - and happy to share the results.

 

Just what does a minimum-overheads wood business look like? I think mine is pretty close.

 

I guess it uses land you already own but which is otherwise unproductive and therefore no rental cost (true in my case).

 

I use a chainsaw and axe - so let's say £1000 or equipment depreciated to zero over 5 years at £200/ann. I do about 50 tons a year - 100 cubes - so that's £2 a cube.

 

I use £30 of bar oil, a chain at £45, half a bar at £50, a sprocket at £50 and 50 litres of petrol at £75. So £250 in consumables, or £2.50 a cube.

 

My 100 pallets last 10 years at £3 each, my 100 bags last 5 at £5 each. So £1.30 a cube.

 

That's £5.80 a cube so far. Hardwood cord is £52 a ton where I live, so £26 a cube. £31.80 a cube so far.

 

My trailer will give me 10 years, cost £1000 second-hand after add-ons like spare wheel and wheel clamp, and will probably cost me £1000 in maintenance bits over that time (e.g. replacement floor, brake pads, lights). So £200/ann, or £2 a cube. £33.80 so far.

 

Assume 20 miles per cube for delivery, 50p a mile running cost for the wife's Defender, £10 a cube.

 

I make that £43.80 in costs. The rest is pay for my time. £56.20 for 2 hours of work when all is told.

 

Anyone want to offer a comparison? Or a critique of the above numbers?

[gensetsteve]

I would agree with most of that. I would say from experience I get 1.5 - 1.6 cu metres of loose logs form green hard wood even less from oak. I would say to earn £25 per hour is realistic any less and those little extras we forget start to erode it away as Dave Martin points out. I would also say you can scale it up if you wanted to by using more efficient machines ie you should be able to do a 40 hour week with out killing your body with the right kit. so processing 16 cu a day then a day to deliver means 1 cu an hour. 40 cu a week = £1000 45 weeks = 45k a year = 1200 tonnes of timber or full time logging

 

Hmmmm... an interesting thread this, and good to be on a forum where folks are disagreeing sensibly instead of the usual mud-slinging I see elsewhere. A very pleasant change.

 

Anyway... I think this is coming down to a conversation on overheads and wanted to take a moment to think about those - and happy to share the results.

 

Just what does a minimum-overheads wood business look like? I think mine is pretty close.

 

I guess it uses land you already own but which is otherwise unproductive and therefore no rental cost (true in my case).

 

I use a chainsaw and axe - so let's say £1000 or equipment depreciated to zero over 5 years at £200/ann. I do about 50 tons a year - 100 cubes - so that's £2 a cube.

 

I use £30 of bar oil, a chain at £45, half a bar at £50, a sprocket at £50 and 50 litres of petrol at £75. So £250 in consumables, or £2.50 a cube.

 

My 100 pallets last 10 years at £3 each, my 100 bags last 5 at £5 each. So £1.30 a cube.

 

That's £5.80 a cube so far. Hardwood cord is £52 a ton where I live, so £26 a cube. £31.80 a cube so far.

 

My trailer will give me 10 years, cost £1000 second-hand after add-ons like spare wheel and wheel clamp, and will probably cost me £1000 in maintenance bits over that time (e.g. replacement floor, brake pads, lights). So £200/ann, or £2 a cube. £33.80 so far.

 

Assume 20 miles per cube for delivery, 50p a mile running cost for the wife's Defender, £10 a cube.

 

I make that £43.80 in costs. The rest is pay for my time. £56.20 for 2 hours of work when all is told.

 

Anyone want to offer a comparison? Or a critique of the above numbers?

[ThrustSSC]

Thrust - what about the following:

Opportunity cost of the land - could you sell it or rent it out to anyone else?

Insurance

Your time to deliver

Admin - invoices, banking, answering the phone

 

£56.20 for 2 hours of work when all is told

 

If you can maintain that rate for 35 hours a week you are looking at gross pay of nearly a grand - not a bad wage really. Obviously you would need to be able to shift nearly 800 cube a year (based on 45 working weeks) to maintain that.

But is £100 a cube realistic for those sorts of volumes?

 

Opportunity cost: good point, but not in this case, I'm afraid. One good reason for finding a productive use for it

Insurance: another good point. i forgot that one. £35/ann more on the Defender insurance - so 35p a cube.

Time to deliver: included in the sums as part of the 2 hours

Invoices: about 1p each

Banking: free

Answering the phone: part of the 2 hours per cube

Accounts I do myself, ditto the VAT, etc.

[ThrustSSC]

Thrust - what about the following:

Opportunity cost of the land - could you sell it or rent it out to anyone else?

Insurance

Your time to deliver

Admin - invoices, banking, answering the phone

 

£56.20 for 2 hours of work when all is told

 

If you can maintain that rate for 35 hours a week you are looking at gross pay of nearly a grand - not a bad wage really. Obviously you would need to be able to shift nearly 800 cube a year (based on 45 working weeks) to maintain that.

But is £100 a cube realistic for those sorts of volumes?

 

Opportunity cost: good point, but not in this case, I'm afraid. One good reason for finding a productive use for it

Insurance: another good point. i forgot that one. £35/ann more on the Defender insurance - so 35p a cube.

Time to deliver: included in the sums as part of the 2 hours

Invoices: about 1p each

Banking: free

Answering the phone: part of the 2 hours per cube

Accounts I do myself, ditto the VAT, etc.

[ThrustSSC]

Excellent that you are taking a realistic view of the costs of running your business but it is easy to forget to include everything, accountancy, bank charges, advertising, phone, insurance, stationary, consumables, motoring expenses etc. etc.

 

Agreed wholeheartedly that one can forget a zillion and one things! I did miss 'insurance' although one could argue that's included in the 50p/mile for the Defender.

 

Accountancy - no cost as I do it myself (I have a bent for numbers anyway, so for me it's straightforward. My welding is less good. Others may be the other way round from me.)

Banking - free (shop around!)

Advertising - Facebook and word-of-mouth only. No need for more as I haven't the stock to sell.

Phone - house phone, no incremental charge

Insurance - covered

Stationery - 1p as mentioned

Consumables - saw consumables covered, printer ink in the 1p

Motoring expenses - wife already has the Defender, extra running costs is the 50p/mile already covered

 

I emphasise though that this is an exercise in a minimum-cost woodcutting business. To get 'bigger' would mean more equipment for greater throughput (processor, tractor, forklift), advertising, investment in rapid-delivery kit (crane trailer?), etc. But as the conversation started as a consideration of competing against benefit claimants doing a sideline, mine was an attempt at an assessment of the costs of a similar minimum-cost sideline business.

[ThrustSSC]

Excellent that you are taking a realistic view of the costs of running your business but it is easy to forget to include everything, accountancy, bank charges, advertising, phone, insurance, stationary, consumables, motoring expenses etc. etc.

 

Agreed wholeheartedly that one can forget a zillion and one things! I did miss 'insurance' although one could argue that's included in the 50p/mile for the Defender.

 

Accountancy - no cost as I do it myself (I have a bent for numbers anyway, so for me it's straightforward. My welding is less good. Others may be the other way round from me.)

Banking - free (shop around!)

Advertising - Facebook and word-of-mouth only. No need for more as I haven't the stock to sell.

Phone - house phone, no incremental charge

Insurance - covered

Stationery - 1p as mentioned

Consumables - saw consumables covered, printer ink in the 1p

Motoring expenses - wife already has the Defender, extra running costs is the 50p/mile already covered

 

I emphasise though that this is an exercise in a minimum-cost woodcutting business. To get 'bigger' would mean more equipment for greater throughput (processor, tractor, forklift), advertising, investment in rapid-delivery kit (crane trailer?), etc. But as the conversation started as a consideration of competing against benefit claimants doing a sideline, mine was an attempt at an assessment of the costs of a similar minimum-cost sideline business.

[Dave Martin]

Its amazing how when you sit down and really REALISTICALLY scrutinise your overheads how it bites into your profits..... how do you store your logs for seasoning Thrust?

[Dave Martin]

Its amazing how when you sit down and really REALISTICALLY scrutinise your overheads how it bites into your profits..... how do you store your logs for seasoning Thrust?

[gensetsteve]

Its amazing how when you sit down and really REALISTICALLY scrutinise your overheads how it bites into your profits..... how do you store your logs for seasoning Thrust?

 

Dave you are supposed to be the optomist I am supposed to be the pessamist or are we becoming realists:001_smile: there is another way of looking at it is you are better working and breaking even than doing nothing and making a loss. I think half the country is treading water waiting for the upturn

[gensetsteve]

Its amazing how when you sit down and really REALISTICALLY scrutinise your overheads how it bites into your profits..... how do you store your logs for seasoning Thrust?

 

Dave you are supposed to be the optomist I am supposed to be the pessamist or are we becoming realists:001_smile: there is another way of looking at it is you are better working and breaking even than doing nothing and making a loss. I think half the country is treading water waiting for the upturn