SMALL SAWMILLS, THEIR EQUIPMENT, ETC. 3 



CAPITAL REQUIRED. 



Insufficient working capital is one of the prime causes for the 

 faihire of a small sawmill to make a reasonable profit. Even in a 

 small operation considerable working capital is necessary for cur- 

 rent expenses. Money must be available to pay for the equipment 

 of the mill, the wages of the crew, the building of sheds, tracks, yard, 

 bunk and cook houses, stables, and blacksmith shops, and for cur- 

 rent expenses and repairs. Money is needed to carry a stock of 

 lumber on the mill yard. These items of expense should be worked 

 out in advance, and when mone}^ is not available at reasonable rates 

 of interest, the prospective operator will be prudent if he resists the 

 desire to become a sawmill owner. Wliile it is true that a few have 

 made a success from a very slender financial start, the, chances of 

 doing this are so remote that to embark in the sawmill business 

 without the requisite capital is more of a gamble than a legitimate 

 business proposition. A junked mill with an accompaniment of a 

 few old axes and broken-clown teams and harness, a rusty cross-cut 

 saw or two, and, worst of all, several big bills and perhaps a mort- 

 gage, make a poor showing after several years of hard work. 



CREDITS. 



The unwarranted extension of credit is an almost universal prac- 

 tice among small operators, and usually results in disaster. The 

 successful mill man sells for cash or negotiable paper. It is a com- 

 mon practice, however, to sell a load or two of lumber on time right 

 along, even though the man who sells it owes his employees for labor 

 or the merchant for supplies. If such a man is not mighty alert, 

 he will soon find himself badly in arrears with his payments. 

 Should that come about, the end of his career as a sawmill operator 

 is in sight. 



COST KEEPING. 



The most important step in the operation of a sawmill is the open- 

 ing of a simple set of books in which is recorded faithfully the cost 

 of everything relating to the business. In the absence of such a rec- 

 ord an operator is sailing on an unknown sea " without chart or com- 

 pass." Yet, except in a very few cases, this necessary side of the 

 business is entirely neglected. In a long experience with portable 

 mill owners it was not until quite recently that the writer met one 

 who gave it proper attention. 



No elaborate system of- cost keeping is needed by the small opera- 

 tor. All that is required is some simple form of accounting by which 

 he can tell the value of his investments, the cost per thousand feet for 

 logging and milling, the stumpage cost per thousand, the cost of re- 

 pairs and new investments, the depreciation on logging and milling 



