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Is SC business plan, small sell?

19K views 90 replies 18 participants last post by  Roland 
#1 ·
Oldtimer makes some good points and they are points I have carefully avoided because I respect the attempts that many are making to be treatment free but since it's out there I do think the issue of whether there is actually any successful business model out there of a profitable self sustaining treatment free operation for those actually wanting to make a living at it. I'm talking about someone who is earning a living by selling honey, bees or pollination income and not the side businesses of writing, teaching or lecturing about being treatment free. I don't mean this in any way as a criticism of those folks and their passion for keeping bees as they see fit, I just think the question of economic viability is a fair one to be addressed on this forum if perhaps not in this particular thread.
 
#30 ·
The only option I am aware of for black 4.9 is by purchasing the frame and foundation combined from Mann Lake and cutting the frame off so you can use the foundation.


As a side note to the above discussion, I had a relatively easy time converting my bees to 4.9mm. One probable reason is that I have had 1.25 inch frames for the last 34 years. The closer the frames are spaced, within limits, the more easily the bees will draw out 4.9 foundation.

DarJones
 
#33 ·
I don't think anyone who has the sole responsibility of operating a business thinks of it in terms of dollars per hour because you are never really off duty. To me it's annual income and what someones life style requires. If you can tighten your belt and make it work without any outside assistance you have every reason to consider your business economically viable.
 
#38 ·
Cost per hive debates can rival small cell debates in spirit primarily because of the wide variety of operations in so many different areas of the country but I can only speak for our particular migratory operation in which we raise all of our own bees and queens. Deductible expenses (not living expenses) each year have been running in the range of $100 per hive, I could see expenses for a smaller operation without our economies of scale going considerably higher. Gross income per hive at current prices could average around $200 plus or minus. This is, of course, all predicated on having a lot of strong healthy hives, if large numbers of them crash then all bets are off.
 
#35 ·
That is not an apples to apples comparison Solly. If you want to get down to profit per hive, you must factor in all expenses plus labor plus depreciation of equipment. With that baseline, a beekeeper has to consider the potential for sellable hive products.

1. Sale of 1 nuc with 3 frame of brood plus a queen $100
2. Sale at retail of surplus honey presuming 100lb average per colony $250
3. Rental of one colony for small fruit pollination $40
4. Sale of wax presuming 2 pounds per colony $10

If you did everything right and hit all potential product sales, each colony should produce about $400

From that you have to subtract:
1. Equipment depreciation $15
2. Labor (your own or hired) $100
3. Packaging, shipping, and miscellaneous $35
4. Treatments of whatever nature $15
5. Transportation $25

Giving a rough cost per colony of $190

Do your own math and adjust the figures any way you choose.

DarJones
 
#36 ·
Now this is good information, I'm glad I asked. Thank you for that Darrel.

I tried to keep track of my hours this year, but I lost track after 30.

Back in 2004 or so, I tried to rent four hives to my aunt to pollinate peaches. She thought I said $35 total, not $35 per hive. She got a bumper crop, I got the shaft. At least the neighbor was generous not to spray while the bees were there.

This really is good information, this deserves a spreadsheet. That's the engineer speaking.:pinch:
 
#37 ·
do not forget insurance, interest on possilbe loans and principle payments. As well there is association fees and levies, atleast in Canada. Add in as well repairs and maintenance, fuel and oil of equipment required to run the operation..not talking hive boxes and stuff, but rather vehicles, trailers, carts, loaders, honey house (building repairs), extraction repairs, etc. Advertising if you sell your honey and wax local. If you scale your honey on your own scales...say to a store, cost of calibrating the scales, Labour also has to include all fees associated with it like Employment insurance, fed tax, provincia/state tax, pension plans...any deductions which the employer adds to. WCB is another. If you file farm tax forms, the need of a good ag accounant. The purchase of bees or queens, syrup, sugar, pollen patties. If you bottle your honey for say farmer's markets, labels, jars/containers, space rental to sell your product, travel expense ...All this will drive up your cost per colony reducing your profit.
Any money put out to operate the hives, extract, pollenate, sell, ship end products should be considered an expense or capital assest purchase which is required to operate the colony from the start to the time the final product leaves your hands should be included when figuring your profit/loss ratio of your hives.
Once a beekeeper starts to do this, and look at everything from a cost stand point it is here one can measure the monetary success by profit or loss. Include all income and all expense. Then you get a true value of cost per hive and income per hive and then the net profit or loss per hive
 
#39 ·
Back in 2004 or so, I tried to rent four hives to my aunt to pollinate peaches. She thought I said $35 total, not $35 per hive.
Maybe you better stick to engineering. :D :)

Seriously, the potential profit is $200 per colony but if that colony dies out, your profit is gone and you are then out the cost of replacing the bees. That gets expensive fast. Missing just one of the profit items above can dramatically affect the bottom line. What if you didn't get to sell that nuc for $100 because you had to use them as replacement for a dead colony? You just cut your potential profit in half.

DarJones
 
#40 ·
Very interesting discussion.

There is one guy who ( I believe ) makes his living from small cell hives, that's Don the FatBeeMan. However I don't know much about him please anyone correct me if I'm wrong. As i understand, he is a bee breeder and sells small cell bees.

I also understand he will treat organically if need be, so he's not treatment free, which is presumably the point of small cell. It might be why he is able to make a profit though, it would put him closer to the same league as traditional beekeeping. He might even be able to charge a premium for his bees as they are small cell.
 
#41 ·
As to profitability, the only outfit I've worked for who did honey and nothing else, the boss told me the first hundred lb's per hive paid the bills. After that, was profit. That was a long time ago but if you work it out, you may find it accurate.

Later I came across a completely different model, an American hippie from the 60's and 70's moved to my country and got involved with bees. His operation consisted of eighty hives, and he made his living from it. Firstly his costs were low he lived in a shack. The other thing is he milked tose hives for everything. Made and sold candles, collected pollen, made boutique jars of honey.
 
#43 ·
I am sorry Barry, I do not understand what you mean. Please explain

If i get what you meant right....it does mean something...it means if you are at a loss, you need to cut, fix, bandage the hemorage so you can make a living, feed the family, pay the bills. The only way that can be done is by knowing where your money goes, especially in the good years so that in the lean years you can cut in places so you can still make a profit, come out ahead, keep the shirt and feed the family.
A business person who knows where the money goes can react faster when the lean times come. A person who does not know, will take longer to react and could cost himself/herself alot.

Oldtimer, I have heard the same said about the first 100 pounds, and it rings pretty true on normal years. In a drought, flood, poor honey crop, heavy bee losses, drop in price, it will throw that model out and as a business person who knows where the money goes, find places to cut cut cut (except never cut on nutrition and health).
A raise in price is a time to replace, rebuild, and sock away for when the down turn hits...and it will.
 
#45 ·
Yes in the end, it's as simple as that.

However Honeyshack is also correct. For example, take a beekeeper in an area where the expected average life of his supers would be 20 years. That means each year, he would have to build new supers, at the rate of 1/20th of his total number of supers, to replace the old, just to stay where he is. But if he had a couple bad seasons in a row and was strapped financially, he may be forced to forego the maintenance, so that on paper anyway, he will still show a profit in dollar terms. Of course, there may be a price to pay later.

With a beekeeping business, there are so many variables, and some of them may pan out over many years, it may take a long time to get the true picture. Most successful bee businesses are in a slow expansion mode. Some of the profits are not realised in cash. I've seen such businesses get sold to a new owner who through lack of understanding, laziness, or whatever, stops replacement etc. For the first few years he "milks" the business, showing on paper, a good profit. But over time, the business itself becomes worth less.
 
#46 ·
This is fantastic, this is really good stuff.

All this time, I hear commercials say things like "you don't understand because your bees don't pay the bills" and "you don't know what it's like because you're not commercial." And so I would ask them to tell me what it's like and then I get nothing. It's the kinda thing that helps build a stereotype. But now I'm learning and really enjoying this thread. Maybe we could get Jim to start threads more often.
 
#47 ·
I would think the reason they might say things like that, is because when you tell them this or that about small cell, or that they are stuck in old ways, or whatever, they think, "hang on, this guy's been going 9 years and has never made any money".

To them, it's about making money, so that will cloud their judgement on what you tell them, and it's about as simple as that.

Stereotypes, are over to whoever wants to make a stereotype. Old, stuck in the past, etc. are just meaningless to the object of the critisizm and they just conclude you don't understand, if you did, you'd be making money. I'm not saying that's a totally correct conclusion, or not, but the two (or more) factions here sometimes don't agree just because where they are coming from is two different planets.
 
#48 ·
When you are the owner of a business, you do not get time off, you do not take vacations, you do not get to consider any time as "your own". It gets down to one simple fact, you are responsible for the business. Nobody else. If it succeeds or fails is entirely up to you. You realize there are failure points that have to be adjusted for and dealt with. There are some things that are out of your control like when the nectar flow fails.

DarJones
 
#49 ·
There are some things that are out of your control like when the nectar flow fails.
This was a valid concern for me this year, which is one reason I decided to raise nucs. It's a diversification of product offering to cover variations in supply and demand. With my weather patterns here I can raise nucs in the spring, but I may not have nectar in late spring, early summer which is when most of it comes in.

One interesting thing I learned from the Heathland Skep Beekeeping videos is how they operated for lean years. Normal years, they process wax and then store it in the attic. In lean years, they sell it. Wax is the only hive product that can be stored like that in any volume and not degrade in quality. It's like a savings account. I have 20 pounds of processed wax saved up. I have a way to go. :)
 
#50 ·
Barry

I'm just saying, once you have your costs, subtracted from your receivables, you'll then have to divide by total hours worked to see if you're really making much of anything for time invested.
I hear what you are saying Barry and completely understand. However, as an owner of a business, one never really gets fully paid for their time. Most times, especially in expansion, the $ go back into the farm or apiary. Most do not realize the payout untill they sell out...selling out in ways the tax man does not get so much. This takes time and prep and planning. Off the rabbit trail, as farmers if we can put food on the table, pay the bills, have a couple of dollars for a few extras, that is all well and good...maybe some in savings for a rainy day. The reality is, we are not farming to get rich or get rich fast. But rather in it for the long haul, the love of bees, the soil and the life it affords. Paying ourselves a wage does not really happen...not until we sell out.
This statement sounds like a contradiction to my earlier post, and it sort of is. But I have yet to meet a farmer who can pay themselves the wages they earned. If they are set up as a corporation, they will get some $ but never fully what they put in in the form of hard labour.
 
#51 ·
There's a joke did the rounds in farming circles here, about when a Labor Inspector visits a farm. He approaches the farmer -

Labor Inspector - Hi, I'm the Labor Inspector. I'm here to check on the workers and ensure their pay and conditions are correct. Who works here?

Farmer - Well, there's the musterer, the fencer, and the general hand. They are all well looked after, you can speak to any of them.

Labor Inspector - That sounds OK but I'll have a chat with them. Anyone else?

Farmer - Well, just one other, the idiot.

Labor Inspector - The idiot?

Farmer - Yes. He's not like the others. He doesn't get paid regularly and he works 7 days a week and sometimes through the night.

Labor Inspector - That's terrible. I want to talk to him.

Farmer - You ARE talking to him.

:D
 
#52 ·
Yes, true what you say. Yet for anyone starting out in a business, one has to face realty and have some way of putting real time to a real dollar amount. You can only put so much money back into the business. You still have to pay the tax man and the banker and the utilities and the grocer. I run my business through a corporation and understand how that works come tax time and the bottom line says you only made x amount of money! :D Always lower than you think it should be, but there are all those dollars that went into the business that you will gain from either right away or in the future.
 
#53 ·
People who have no farm and beekeeping is farming, back ground don't really understand. You work all available hours. You support your family as cheaply as possible. You put every dollar into the business and sucess is paying off enough of the loans that the banker will let you do it all again next year. Dollar per hour is just not realistic or important. Having the ability to choose the hour off is more to the point, not having a boss tell you when that hour is. If you succeed it is proof you are a darned hard man to work for. You work the oldtimers IDIOT to the bone. You sock every dime you make back in the business, because you may have to live off your depreiciation for years! And yes, as someone said, when you are too old to enjoy the money you may sell the business and have the money to do the things you never had time to. Of course if you are passing it on to a kid tha equation changes too! Dollars per hour is for city people. You have to live off the land or be self employed to understand that I think.
 
#59 ·
Been there (farming), done that, and failed at it, that's why I have so much respect for you commercial guys that figure out a way to be successful no matter what methods you use.

That’s also why I think the whole premise of trying to be completely treatment free in a fulltime commercial environment is unattainable. Your whole mind set has to be different if you’re fulltime commercial and you have to consider money and time first in every decision. As a sideliner though, I don’t have those same money constraints.

:lpf: You might want to tell D. Semple that all those numbers and figures he's working on mean nothing. He just has to give his blood to the business. :) When I was 20, I could have embraced your business plan. Now I have real obligations to meet and have to have real numbers to base a decision on.
I put up for discussing my little sideline SC / Treatment free business plan because that’s the level where I believe being treatment free can be successful and where it should be promoted.

Ya Gadda Wanna. I don't think Steve Jobs was concerned about his return per hour.
I agree with your “Ya Gadda Wanna”, determination is vital.

But, Barry’s concern about maximizing the value of your time is also vital, because like everybody else, I have serious time constraints and ultimately that will determine if I can remain a sideline beekeeper.

Don
 
#54 · (Edited)
That's great Vance, but it does nothing for coming up with a business plan. One must plan, not just work your head off. You can't sock every dime you make back into the business as I already explained. If your business plan ends up making you $50,000 a year, and you end up working "all available hours", I'd end up passing on it and instead getting a job that pays $50,000 working 8 hour days so I still have a life to give to my family, others, and myself. So scrap the per hour figure, I don't care. Make it a yearly figure, it's all the same thing, money earned for time invested. How much is your time worth?
 
#55 ·
Ya Gadda Wanna. I don't think Steve Jobs was concerned about his return per hour. He worked all available and expected those around him to. I guess my farm boy premis is full of holes eh? Yes it is hard on families. The business plan is to pay off your loan so you can borrow a larger amount. The business plan is to take a vacation after you can afford it, as time allows. It is what built America. If it's not for you, the guvmint is always hiring.
 
#57 · (Edited)
I don't think Steve Jobs was concerned about his return per hour.
:lpf: You're comparing Steve Jobs to beekeeping? No, he certainly didn't have to be concerned about his return no matter how you figure it.[/QUOTE]

If it's not for you, the guvmint is always hiring.
I've already known it's not for me a long time ago. Your snide remark that the alternative is a government job doesn't impress me. I'll continue to run my own construction business, park the truck at the end of the day, take a vacation now and then, spend time with family and friends.

You might want to tell D. Semple that all those numbers and figures he's working on mean nothing. He just has to give his blood to the business. :) When I was 20, I could have embraced your business plan. Now I have real obligations to meet and have to have real numbers to base a decision on.
 
#56 ·
I live in Nevada, but was born and raised in Kansas. I have always told people around here that they have no idea what real gambling is. Try betting your entire livelihood on the weather sometime. then you have an idea what gambling is like. Just a peek though.
 
#60 ·
This is a very interesting thread to ponder. I have roughly 30 hives spread over four yards. Half of the bees are Russians and the others are Northern stock. I'm on large cell and use treatments when I think them necessary.

I very much want for successful commercial treatment free beekeeping to be a reality. My belief is that in certain areas it can be done. In other areas you can try all you like but there are too many factors outside your own control to make treatment free attainable.

The old saying "all beekeeping is local" is very true. Conditions where I'm at on the coast of Maine are such that if I were to try to replace all my comb in one year with small cell I might as well forget about a honey crop. My approach to small cell & treatment free beekeeping would of necessity be very different from how others have experienced it. And I'm frankly not excited by a potential 90% loss of bees, esp considering the investments I have already made in equipment and bees. In my location I have to be very aware that I am located in wild blueberry country and that lots of commercially rented hives visit once a year to pollinate. It would not surprise me if there were 500 colonies placed within flying distance of my home yard.

To bring this back to the OP, I'm not yet convinced (and I would like to be) that a commercially viable small cell & treatment free operation can operate in my area. Maybe someday, but not yet. And maybe too it could work for someone who was intensively managing a few hives - I haven't had the gumption to experiment for myself and find out.
 
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