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  1. #1
    Join Date
    Aug 2014
    Location
    Lake Leelanau, Michigan
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    89

    Default Cost of doing business

    I'm a chef and thinking of starting 10 hives next spring in an attempt to enter the honey biz. My question is: what are the percentage breakdowns for a honey producer? For example, in the restaurant we usually figure our cost of doing biz this way: figure a meal costs $10, $3 of that is the restaurants cost to buy the food, $3 of that is also covering labor costs, and $3 of that is overhead (utilities, rent, etc) so we have 30% food cost, labor, and overhead totaling 90% cost of doing biz and 10% profit. In reality most restaurants only make 3-6% profits. So, is there any such breakdown for honey producers?

  2. #2
    Join Date
    Aug 2002
    Location
    Nehawka, Nebraska USA
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    45,786

    Default Re: Cost of doing business

    In most businesses the costs and prices are fairly fixed. It's really only the demand that might change some, but if you advertise and you have good product you can probably predict fairly well what your profit will be. Beekeeping is agriculture. And agriculture is all about the weather. Often in ways you don't expect. Too much rain can be as bad as not enough. The right amount at exactly the right times is rare. In an awesome year I've gotten 200 pounds per hive. In a bad year I've fed them 60 pounds of sugar and gotten nothing. It's hard to say what an "average year" is when even the less extreme years are pretty erratic numbers. Probably you can say Nebraska makes about 40lbs of honey per hive in an average year. But we never have an average year. Maybe some places are less extreme, but I sort of doubt it...
    Michael Bush bushfarms.com/bees.htm "Everything works if you let it." ThePracticalBeekeeper.com 40y 200h 37yTF

  3. #3
    Join Date
    Jul 2012
    Location
    lafargeville ny usa
    Posts
    604

    Default Re: Cost of doing business

    welcome to agriculture, as Michael said the big variable is the weather, not controllable. pests, diseases and bee behavior, we have influence on this stuff up to a point. for the small guy we actually control retail price, this is unusual in agriculture. the large operators rely on the price set by the commodity market, calling this a challenge identifies you as an extreme optimist but the big guys do have real economies of scale. the big guys also have to worry about the price of diesel fuel... as for getting down to percentages like a good manager in the restaurant business not too good is the answer. 10 hives is miniscule, 100 hives is part time... I saw a tee shirt that said "I used to have money now I have bees" this is the best example of immediate realistic profit potential that I have seen if you figure ALL of the costs.

  4. #4
    Join Date
    Oct 2013
    Location
    Marietta, Ohio USA
    Posts
    107

    Default Re: Cost of doing business

    As in any business you will find your first year costs through the roof with little return. So you have to be able to sustain your costs/investments for the first year and expect little if any return. I have over $1,500 invested in three hives so far and probably will not see any honey this year, unless a fall flow comes on.

    I am a first year beekeeper, but have owned a couple small businesses, this has been the case in most of those ventures as well.

  5. #5
    Join Date
    Feb 2014
    Location
    new york, ny
    Posts
    66

    Default Re: Cost of doing business

    i'm sure someone will prove me wrong. but i don't think small scale beekeeping (or honey production if that's what you're really talking about) can be broken down like you're asking. because, like michael said, you're trying to predict the unpredictable. maybe if you expand to 200 hives it would take some edge off the extremes.

    your real question should be much simpler: if i invested $300-$500 per hive (plus your time and education) and made $0 income, would i still do it? most of us have said, "YES PLEASE!"
    matthew p greer
    architect beekeeper

  6. #6
    Join Date
    Aug 2014
    Location
    Lake Leelanau, Michigan
    Posts
    89

    Default Re: Cost of doing business

    Ok. Let's go at this from a different angle. I already know my initial outlay for purchasing hives and equipment and don't expect to see a return on that cash for a few years. What is the cost for running a hive for the year? Feed, supplements, mite control, requeening, etc.

  7. #7
    Join Date
    Apr 2014
    Location
    Ashtabula, OH
    Posts
    316

    Default Re: Cost of doing business

    Quote Originally Posted by Maplevalleykennel View Post
    Ok. Let's go at this from a different angle. I already know my initial outlay for purchasing hives and equipment and don't expect to see a return on that cash for a few years. What is the cost for running a hive for the year? Feed, supplements, mite control, requeening, etc.
    You forgot YOUR TIME OR LABOR. One factor I have found with my students is they want to be big and profitable. One or two hives does not consume a lot of time. Where as 100 take time. You also need to have a mentor to learn from.
    Michael Bush, Thefatbeeman and others here are great teachers. You cannot learn honey beekeeping from only books. It takes hands on learning and a good mentor to learn this trade.

    45 plus years beekeeper.

  8. #8
    Join Date
    Dec 2005
    Location
    Brasher Falls, NY, USA
    Posts
    26,575

    Default Re: Cost of doing business

    Quote Originally Posted by Maplevalleykennel View Post
    Ok. Let's go at this from a different angle. I already know my initial outlay for purchasing hives and equipment and don't expect to see a return on that cash for a few years. What is the cost for running a hive for the year? Feed, supplements, mite control, requeening, etc.
    $150 to $200 is what I have heard.
    Mark Berninghausen "That which works, persists."

  9. #9
    Join Date
    Aug 2014
    Location
    Lake Leelanau, Michigan
    Posts
    89

    Default Re: Cost of doing business

    Don't worry, I was definitely not going to forget my time. And I am in the process of looking for a mentor. I have contacted one guy but he is a commercial pollinator so he is probably pretty busy. I have the number of a farmer nearby who has bees and am calling him tomorrow.

  10. #10
    Join Date
    Aug 2002
    Location
    Nehawka, Nebraska USA
    Posts
    45,786

    Default Re: Cost of doing business

    >What is the cost for running a hive for the year? Feed, supplements, mite control, requeening, etc.

    What I spent per hive over the last six years:

    Feed: $0
    Supplements: $0
    Mite control: $0
    Requeening: $0
    Michael Bush bushfarms.com/bees.htm "Everything works if you let it." ThePracticalBeekeeper.com 40y 200h 37yTF

  11. #11
    Join Date
    Aug 2014
    Location
    Lake Leelanau, Michigan
    Posts
    89

    Default Re: Cost of doing business

    Quote Originally Posted by Michael Bush View Post
    >What is the cost for running a hive for the year? Feed, supplements, mite control, requeening, etc.

    What I spent per hive over the last six years:

    Feed: $0
    Supplements: $0
    Mite control: $0
    Requeening: $0
    Hey! I was just reading "realistic expectations" on your website and you said you fed 60 lbs of sugar to every hive one year. Unless you have a free source for sugar that would not equal "Feed=$0". Although I really like what you have to say there. Thanks that will be a font of knowledge for me as I have decided to go as chemical free as possible.
    Last edited by Maplevalleykennel; 08-08-2014 at 07:29 AM. Reason: Add on

  12. #12
    Join Date
    Jul 2012
    Location
    lafargeville ny usa
    Posts
    604

    Default Re: Cost of doing business

    the last 2 posts are a perfect example of ask 12 beekeepers a question you will get at least 13 completely different answers. mr. bush seems to have 2 answers.

  13. #13
    Join Date
    Dec 2005
    Location
    Brasher Falls, NY, USA
    Posts
    26,575

    Default Re: Cost of doing business

    Maplevalley,
    The answer to your questions has so many variable involved in figuring that answer out that there actually is no answer other than, perhaps, Depends.
    Mark Berninghausen "That which works, persists."

  14. #14
    Join Date
    Jan 2009
    Location
    Clifford Township, PA
    Posts
    1,929

    Default Re: Cost of doing business

    Quote Originally Posted by Maplevalleykennel View Post
    Hey! I was just reading "realistic expectations" on your website and you said you fed 60 lbs of sugar to every hive one year.
    Did that year fall with the last 6 years as he described his costs?

    Wayne

  15. #15
    Join Date
    Aug 2002
    Location
    Nehawka, Nebraska USA
    Posts
    45,786

    Default Re: Cost of doing business

    >Hey! I was just reading "realistic expectations" on your website and you said you fed 60 lbs of sugar to every hive one year. Unless you have a free source for sugar that would not equal "Feed=$0".

    Yes I did. I also said that in this thread. And it was NOT in the last six years. In the last six years I've spend $0 and fed nothing. But have I spent money ever on sugar? Of course. If I buy any, it's usually 1,000 pounds...
    Michael Bush bushfarms.com/bees.htm "Everything works if you let it." ThePracticalBeekeeper.com 40y 200h 37yTF

  16. #16
    Join Date
    Jan 2009
    Location
    Clifford Township, PA
    Posts
    1,929

    Default Re: Cost of doing business

    Quote Originally Posted by mathesonequip View Post
    the last 2 posts are a perfect example of ask 12 beekeepers a question you will get at least 13 completely different answers. mr. bush seems to have 2 answers.
    More an example of not reading carefully.

    Wayne

  17. #17
    Join Date
    Aug 2014
    Location
    Lake Leelanau, Michigan
    Posts
    89

    Default Re: Cost of doing business

    Sorry, I was just trying to be sarcastic. Doesn't always come across very well in this medium. Thanks for all your info. So, instead of feeding do you just combine weaker hives with stronger ones in fall?

  18. #18
    Join Date
    Aug 2002
    Location
    Nehawka, Nebraska USA
    Posts
    45,786

    Default Re: Cost of doing business

    >So, instead of feeding do you just combine weaker hives with stronger ones in fall?

    If a hive does not have enough stores in the fall, I would give them stores from one that has an excess or, if that isn't available, I feed them. Weak and short on stores are not directly related. A very strong hive can be short on stores.

    As far as weak hives, I used to combine weak hives, but in recent years have tried overwintering them, if I think they are small because of a late start. They often winter pretty well. If they are small because of a failing queen, and that is my assessment, I would probably dispose of the failing queen and combine with a small hive that has a good queen (but probably a late start). These do not winter well otherwise.
    Michael Bush bushfarms.com/bees.htm "Everything works if you let it." ThePracticalBeekeeper.com 40y 200h 37yTF

  19. #19
    Join Date
    Jul 2010
    Location
    jackson county, alabama, usa
    Posts
    4,368

    Default Re: Cost of doing business

    this is my fifth season selling honey and i also sold nucs this year. looking strictly at cost of materials vs. sales i am just now getting into the black. since i formed an llc for the bee business the tax savings have made it indirectly more profitable. cost for my hours spent however likely puts me at paying myself less than minimum wage, but now that everything is paid for that may improve to some degree in future years.
    journaling the growth of a treatment free apiary started in 2010. 20+/- hives

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