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  1. #1
    Join Date
    May 2012
    Location
    Cheyenne, Wyoming, USA
    Posts
    1,693

    Default Yearly business plan - realistic or not? What else should I account for?

    Hello all,
    I am looking at buying out my boss. He has 150 hives, and would like to sell out, as he is getting older (65 years old). He treats for most of the pests and diseases, but I would eventually like to go treatment free. He currently only sells honey, no nucs or other hive products. I would like to become migratory when I own enough colonies. Is this a reasonable business plan? Please let me know if there is something you would change. I'd like to be as realistic as possible. Thanks in advance.

    150 colonies - annual business plan

    Expenses:
    Treatments
    - 2 Tylan DC-120 ML
    - 1 Bee-vert sugar 50lb SG-850 ML
    = $134.50
    - 5 Mite Away II Quick Strips DC-640 ML
    = $684.00
    - ParaMoth 35lb bucket DC-132 ML
    = $119.95
    - 2 Fumagilin-B 9.5g bottles DC-115 ML
    = $289.90

    Candy/feed
    - 7 Bee Pro 50lb bags FD-201 ML
    - 115 bags GV Sugar 25lb from Walmart
    = $1980.65

    Propolis traps
    - 100 traps @ $5.95 each = $595.00

    Queens:
    - Queen rearing supplies = $500
    = $500.00

    Nuc supply:
    - 20 cardboard nuc boxes @ $5.95 each = $119.00
    - 20 Nuc box entrance caps @ $0.16 each = $3.20
    - 100 deep frames w/ foundation @ $2.30 each = $230.00

    Gas:
    - $1500

    Total cost: -$6,156.20


    Profit
    Honey:
    - 50 lbs per hive = 7500 lbs @ $2 per lb = $15000

    Propolis:
    - 3 oz per hive X 100 = 18 lbs @ $30 per lb = $540

    Pollen:
    - 50 lbs of pollen @ $17 per lb = $850

    Nucs:
    - 20 nucs @ $125 each = $2500

    Queens:
    - 100 Russian queens @ $30 each = $3000.00
    = $3,000.00

    Total gross income: $21,890.00

    Total net income: $15,733.80

  2. #2
    Join Date
    Nov 2011
    Location
    Rader, Greene County, Tennessee, USA
    Posts
    6,317

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Hmmm, its a start, but if its a business plan, there are some key items missing.

    At a minimum, the plan doesn't mention any extracting operations, but you are selling honey. How are you getting the honey ready for market? Even if you plan on using your current employer's equipment, presumably some payments are involved.

    If you are paying for purchasing the business over time, you need to determine if the cash flow is adequate to make those payments. So where is that in your plan? What is that gas going to be used in? If it is a vehicle, that is likely a depreciable asset.

    And, FYI, the heading where you show "Profit" should be Income. Profit is whats left over after everything else is paid for. Terms like this may not be important to you, but they will be to the banker that reads your plan.
    Graham
    -- The real problem is not precise language, it's clear language. - Richard Feynman

  3. #3
    Join Date
    May 2012
    Location
    Cheyenne, Wyoming, USA
    Posts
    1,693

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Thanks Rader,
    That's a help. Yes, I understand this is not a correctly termed plan, but it is supposed to be the gist of it. I am not very knowledgeable yet as far as business goes, so everything is a help. Yes, I plan to purchase just the working hives from him, and rent the extraction facilty. I don't know yet if I will buy or rent the Hummerbee forklift. Anyway, thanks for the help! I look forward to more.

  4. #4
    Join Date
    Dec 2008
    Location
    Menomonee Falls, Wis.
    Posts
    2,728

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Where is CCD covered?

  5. #5
    Join Date
    Apr 2011
    Location
    Weeki Wachee, Florida,USA
    Posts
    2,020

    Default Re: Yearly business plan - realistic or not? What else should I account for?


  6. #6
    Join Date
    Dec 2008
    Location
    Menomonee Falls, Wis.
    Posts
    2,728

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Where is CCD covered?

    Crazy Roland

  7. #7
    Join Date
    May 2012
    Location
    Cheyenne, Wyoming, USA
    Posts
    1,693

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Roland,
    Thanks for the reminder! I forgot to factor in losses. What is wrong with me? Thanks! I will factor that in too.

    Mbeck,
    Thanks for the link! I really appreciate all the replies so far.

  8. #8
    Join Date
    May 2002
    Location
    San Mateo, CA
    Posts
    4,936

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Labor?
    Four tons of honey is a lot to lift.
    The empties into the truck, off the truck, onto the hives, fulls off the hive, onto the truck, off the truck into the extracting room, into the uncapper, into the extractor, out of the extractor, back onto the truck empty, out of the truck, onto the hive, off the hive, onto the truck, off the truck, into the storage room. Now ad all the motions of medicating, pollen trapping, propolis production, feeding, making nucs........all by your lonesome?

  9. #9
    Join Date
    Sep 2011
    Location
    Skiff, Alberta, CA
    Posts
    497

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Treatment free? Migratory? Nothing like spreading your diseases around.

  10. #10
    Join Date
    May 2012
    Location
    Cheyenne, Wyoming, USA
    Posts
    1,693

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Quote Originally Posted by odfrank View Post
    Labor?
    Four tons of honey is a lot to lift.
    The empties into the truck, off the truck, onto the hives, fulls off the hive, onto the truck, off the truck into the extracting room, into the uncapper, into the extractor, out of the extractor, back onto the truck empty, out of the truck, onto the hive, off the hive, onto the truck, off the truck, into the storage room. Now ad all the motions of medicating, pollen trapping, propolis production, feeding, making nucs........all by your lonesome?
    Yes, I plan to do it all by my "lonesome self." I do most of it by myself currently, and it's only a part time job now.

  11. #11
    Join Date
    May 2012
    Location
    Cheyenne, Wyoming, USA
    Posts
    1,693

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Quote Originally Posted by Haraga View Post
    Treatment free? Migratory? Nothing like spreading your diseases around.
    When I become migratory, I don't think I'll be treatment free. I kinda counted on not being TF because of all that gets spread around. That's one of the reasons I counted treatment in.

  12. #12
    Join Date
    Nov 2008
    Location
    Grand Rapids, Ohio
    Posts
    854

    Cool Re: Yearly business plan - realistic or not? What else should I account for?

    $1500 for fuel. You better keep them in you back yard. If producing only 7500 lbs you better retail. You'll need every penny you can get. A forklift is last thing I would worry about with 150 hives.

    Like looking at your number! Well you have to start somewhere and might even have to learn the hard way too.

    Sold my first ton over 30 years ago for over $800, and that was from 18 hives. The game was changed a lot since then, and so has the price of honey at $4500 a ton.

    Best of luck.

  13. #13
    Join Date
    May 2010
    Location
    Spokane, Washington, USA
    Posts
    734

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    You will need the forklift (at least rent) if you want to be migratory unless you have a few strong brothers then they take the place of a forklift. If you want to be treatment free and be migratory then you will most likely go bankrupt.

  14. #14
    Join Date
    Jun 2009
    Location
    Montgomery County, NY
    Posts
    1,845

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Forklifts are cheap to rent to unload and load semis.

  15. #15
    Join Date
    Feb 2006
    Location
    Herrick, SD USA
    Posts
    4,442

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    I simply can't put into a few paragraphs how difficult it will be to get from where you are to the point where you are a self sustaining profitable commercial endeavor. You have to follow a certain progression and for the foreseeable future it needs to be a sideline operation with a day job on the other side. Don't give up your dream just be realistic and don't even think about things such as forklift purchases until you have grown your business far beyond where it is now. Why even think about selling nucs when your first consideration should be keeping your own boxes filled with bees and then expanding your numbers? I wouldn't even consider selling a strong nuc in the spring for $125 when it might well make me $200 worth of honey in only a few short months.
    "People will generally accept facts as truth only if the facts agree with what they already believe."- Andy Rooney

  16. #16
    Join Date
    Jun 2009
    Location
    Montgomery County, NY
    Posts
    1,845

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Quote Originally Posted by westernbeekeeper View Post
    Thanks Rader,
    That's a help. Yes, I understand this is not a correctly termed plan, but it is supposed to be the gist of it. I am not very knowledgeable yet as far as business goes, so everything is a help. Yes, I plan to purchase just the working hives from him, and rent the extraction facilty. I don't know yet if I will buy or rent the Hummerbee forklift. Anyway, thanks for the help! I look forward to more.
    So if you want to be successful (and we all think we are) you really need to know the business portion. You are going to have to carefully plan out all your expenses. If you rent the extraction facility will it be for 1 month or 12 months? Then powering, heating, etc... can get aweful expensive 12 months out of the year.

    If you are going to manage 150 colonies why cant you move the extraction to say your garage or basement, or put up a small outbuilding that you can heat for extracting? You dont need much room to extract 7K lbs of honey. You also will NOT be able to afford to sell all your crop wholesale. You will need to get as close to or over $5.00 a lbs so you can start to afford migratory beekeeping expenses.

  17. #17
    Join Date
    May 2012
    Location
    Cheyenne, Wyoming, USA
    Posts
    1,693

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    You have a good point, Jim; thanks for the response. Also, BMAC, thanks too, I am learning and everything y'all give me helps. My boss has a large steel building where he does his extracting. He owns two 60-frame extractors, a dakota gunness uncapper, and two conveyer belts. He uses the rest of the space in the building for storage. I would plan to rent it for 1-3 months out of the year.

  18. #18
    Join Date
    Jan 2012
    Location
    Maricopa, Ariz, USA
    Posts
    90

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Ben,
    After these folks are done adjusting/shredding your business plan....... take all their input and double your expected expenses & halve your anticipated income, now you'll be approaching a realistic number.

  19. #19
    Join Date
    Dec 2010
    Location
    Coatesville, Pa, USA
    Posts
    838

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    I wish from my VERY LITTLE experience that I could say that dback is wrong. From being a hobby beekeeper / small sideliner I have done fairly well this year but I haven't broken even yet. It has costed a lot more than what I had thought. I thought I had a fairly clear plan and my expenses are higher than what I had thought. I underestimated sugar costs in the fall, all the time it takes when you have a small amt. of hives and you dont' want to lose one and have a failing queen, how a hive can go from your strongest (4 deeps and bearding all the time) to your weakest and finally abscond with a virgin queen, etc. etc. etc. Having a plan is a necessicary place to start, but unfortunately in my experience I underestimated. I'm not saying it can't be done because it is being done by others and God willing I'll be one of them someday. I have had a TON of fun learning / growing this year (from 3 to 7 and I sold one also). Just my 2c. for what it's worth.

  20. #20
    Join Date
    Oct 2011
    Location
    Edmonton, Alberta, Canada
    Posts
    686

    Default Re: Yearly business plan - realistic or not? What else should I account for?

    Is there any way to increase your expectation for lbs/hive and price per pound? Set a goal of 75lbs or 100lbs or 125 lbs, etc. And work towards getting a better price per pound, 4$, $5, $6 or better.

    It's been a good year for me at 100lbs per hive wintered extracted and have another 100lbs of wet honey per hive still on the hives. Hoping they cap it soon with lower humidity and I can get on with sugar syrup feeding. Been selling at $4 per pound which is on the low side.

    Be realistice but your gross income seems marginal to run and grow the business so it is a full time job. As others have pointed out you need vehicle cost, ?fork lift, extracting cost, taxes/rent, building, utilities, and extracting cost. However, you could easily double your gross income.

    Follow your passion and good luck.
    If you always do what you always did, you'll always get what you always got!

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