Shark Tank - expansion

[Grant]

Okay, let me put another proposition on the table.

Suppose you have a 200 hive operation, fairly successful, but it takes all your spare time above your normal job and family responsibilities. You raise your bees, harvest the honey, sell at farmer's markets and wholesale through a couple of grocery stores.

Suppose you want to approach an "investor," one who will put up some cash for expansion. You can add more hives, open new markets, allowing you to quit your "day job," and continue your devotion to the bees.

What kind of deal would you offer? They don't want to mess with the bees, they see your success and want a slice of the financial pie and allow you to pursue your passion. They are an investor and not a partner.

Suppose, as well, that you are not financially pressed, operate relatively debt-free, and really enjoy the bees.

Any thoughts? How would you market such an idea?

Grant
Jackson, MO

[RayMarler]

Taking on an "Investor" is the same as taking on debt. So you'll be quitting your day job and taking on more debt. Will your apiary expansion pay for the added debt and still provide a reasonable income over and above the said added debt?

[fish_stix]

Beekeeping is risky enough without taking on a debt load! Do it on your own; takes longer but you have no worry to keep you up at night. 200 hives means 400 minimum next year if you only split once, assuming you have the equipment to do that many. Set up a queen cell starter or two and queen your splits with your own cells. Keep expenses to a minimum by building your own boxes, tops, bottom boards, pallets, over the winter. You'll be busy as a one armed paper hanger, but in the end it will be all yours. My oldest son and I are doing just that. He's a full time police officer and I'm a semi-retired general contractor. You just have to make good use of the time you have available. I've owned several businesses and none of them ever came with an 8 hour day, more like 12-14 if you want to make a living!

[Tom G. Laury]

A Black Cat just crossed your path.;)

[Tom G. Laury]

Three or four years ago a group of almond growers met with a local bee operator. They wanted to purchase their own colonies. Yours to have for the rest of the year, free. Fine, said the bee guy, but I only guarantee 50% survival per year. Deal didn't go.

[StevenG]

My fear is the investor would then "own" me, and I'd be working for him, instead of me.

If my 200 colonies was not my source of livelihood, but I wanted it to become so, I would take ALL of the money earned for a year or two from the bees, plow it back into equipment so I could expand up to the number of colonies that would enable me to quit my day job. Since I don't need the income off the 200 hives (I have a day job, remember?), then that would finance my expansion, and I would have no debt. No investor. No one who thought he was my boss or deserved income off my labors.

I would also get any family members I could involved to help get the expansion going....like my grandkids helping me assemble supers and frames! ;)

[Countryboy]

I don't have nearly that many hives, and if someone came to me wanting to invest in my operation, I would want them to invest time and labor. Extra time and labor seems harder for me to find than the money capital.

I would likely try to find some younger person who wanted to get into bees, but didn't have the finances - and I would try to partner them with this invester.

Another option would be to branch out into another area of beekeeping. For example, start nuc production, pollination, or queen breeding. Use the investor dollars to hire a worker, and you provide the management. You already said they saw your success and wanted a slice of the financial pie. With investing, it is not all reward without any risk. (which is what it sounds like the investor is after.) Branching out into another line off bee stuff provides the opportunity for reward, but also comes with some risk.

[The Honey Householder]

As a second generation comm. honey producer. I would have to say NO!!! Unless your investor is your wife.

[Grant]

Thanks for your input. Your advice is well taken.

Grant
Jackson, MO

[EastSideBuzz]

Your thread title says that you were worried already. So all we have done is confirm what you already suspected we would say.

Just remember what a wise Samoan man once said "Upu fa’aaluala".

[jean-marc]

If I wanted money I think I would the bank. After the initial hassle to get the money which can be a bit overwhelming, they pretty much leave you alone. They'll want the yearly financial reports and tax forms, but that's it. The silent partner may not be so silent and could drive you crazy. I think a lot of beekeepers enjoy working alone with bees. I enjoy the solitude of it. Having to answer to somebody would spoil it for me.

Jean-Marc

[wfarler]

investors get kinda funny about losing money. farmers hunker down and work harder and try to get smarter.

in business terms your risk curve and yield curve do not align with most investor's expectations. They don't want to shoulder your high risk and you don't want to give away your best years when the rains and weather and bees reward you richly.

[EastSideBuzz]

Upu fa’aaluala.

Definition: When two men are in partnership, they must be of one mind. Should one be weak and fainthearted, the undertaking will fail.

http://scanman9.tripod.com/sitebuildercontent/sitebuilderfiles/alagaupu2.htm

[Ian]

Like it was said here already,
let the bank set your expansion up,
If you have a solid business plan, and not alot of debt right now, doubling your operation would be a good second step.

[LT]

What is UPU? Faluaalua is good by right?

[chief]

I don't like to tell people what to do but whenever I am thinking of going into debt I just remember what the bible says (and what Dave Ramsey has permanently ingrained into my brain) and that is . . . ‘the borrower is SLAVE to the lender.’ I like the recommendation to build slowly on your own with your own capital/profits. If you decide you must borrow money then I have learned it would be better to borrow from a bank rather than a friend/family. I have learned all of this the hard way.

[EastSideBuzz]

I am thinking UPU refers to "one" or Ones" refering to a person kind of thing. Not exactly sure the exact meaning. :ot:

Upu fa’aalualu. Words to encourage a person to strive after his goal, and not allow himself to be deterred by any consideration or obstance.

Upu fa’aaluala. When two men are in partnership, they must be of one mind. Should one be weak and fainthearted, the undertaking will fail.

Upu vivi’i. Words of praise to commend a person’s power and strength.

Upu fa’anuoanuoa or alofa referring to a person who has come to harm through another’s fault.

Upu faifai referring to weakness and inefficiency.

Upu faifai. Mocking words referring to common people who begin to eat before the high chiefs, and to similar cases.

Upu fa’anoanoa. The evil a man does, lives after him.

Upu fa’anoanoa or alofa referring to a person who is in danger of his life.

[Grant]

Your thread title says that you were worried already. So all we have done is confirm what you already suspected we would say.

Just remember what a wise Samoan man once said "Upu fa’aaluala".

No, not really worried, but the consensus in this thread doesn't surprise me and pretty much confirms my gut intuition. Sometimes you just need to hear the same advice from a different source. Kind of like when my 81-year old father gave my 18-year old son some advice. Grandpa was the wisest person in my son's mind, even though Grandpa simply said the same things I was telling my son all along.

I borrowed the thread title from a new television show in which business people are trying to convince investors to pony up some money for expansion.

Grant
Jackson, MO

"By the time a man figures out his father is wise, he has a son of his own who thinks he's a fool."

[Gene Weitzel]

My boss is a wealthy entrepreneur. He always says he will invest in "sweat equity" type deals where he accepts all the financial risks (interpret, he's the bank) and you can show that his permanent 50% interest in the endeavor has the real potential for him to recover his entire investment within a year. I can assure you that I would NEVER want to be "in bed" with him on any deal, no matter how good it looks.

[Michael Palmer]

Why not ask the FmHA..Farmers Home Administration? That's what I did about 1980. Had 50 colonies. They loaned me enough to set up 200 more. If you're handy with a table saw, and you have access to cheap lumber, you could hold the costs down.

There may also be programs in MO like the one in Vermont. VIDA...Vermont Industrial Development Aithority loaned me enough to buy the operation that I was managing...in the late 80's. Terms were easy, and interest was low.

I'd stay away from partnerships and IPO's.