Average Monthly
Expenses and Income

The following is an example of monthly expenses and income from operating a small mill processing 1500 pounds of fiber a month. These prices may vary depending on location, and the mill owners’ discretion. The cost reflects a three year operating history in Michigan and were updated in February 2015. As a rule of thumb, 1 pound of yarn requires 1 hour of labor.

Typical Monthly Expenses Amount
Insurance: Workman’s comp required in Michigan $450
Insurance: Machines, buildings, and customers’ fiber while in your possession $400
Soap and processing oil $500
Electricity $250
Propane: Heating wash water and building heat $900
Trash pickup $65
Phone $120
Fax $35
Website (updated and maintained by owners) $10
Office supplies $100
Advertising $500
Misc $200
Payroll: 5 employees working 220 days per year at $10 per hour plus $2 per hour taxes paid by employer. Mill owner is not one of the 5 employees $10,267
Loan payment if needed: Suggested start up loan of $110,000 at 5% interest for 15 years $900
Total monthly average operating cost $14,697
Typical Monthly Income Amount
500 pounds raw fiber processed as roving at $7.20 per pound incoming weight $3,750
1000 pounds of fiber processed into yarn will yield about 600 pounds of yarn on an average, at $25 average per pound finished weight $18,000
Total average monthly income $21,750

Average income minus average expenses = $7053 monthly profit
Please keep in mind this does not take state or federal taxes into account.

This can only be used as a estimated income potential, on a good month when your mill is at top operating performance. There is nothing added in the bottom line for property tax or building maintenance.

In my opinion a small mill is meant to be a supplement to farm income and not a family’s main source of income. The work is dirty, dusty and hard, but rewarding. Most importantly you will help preserve a rural way of life, by adding value to the small farms product.