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

42K views 106 replies 38 participants last post by  sqkcrk 
#1 ·
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
 
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#2 ·
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.
 
#3 ·
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.
 
#16 ·
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.
 
#8 ·
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?
 
#12 ·
$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!:D 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.:thumbsup:

Best of luck.
 
#15 ·
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.
 
#17 ·
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.
 
#19 ·
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 ·
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.
 
#22 · (Edited)
However, you could easily double your gross income.
On paper.........be very careful with this line of thinking.

I wish you the best but you asked for "realistic". These guys will point out the obvious.......I've got just a very few expenses off the top of my head that you've overlooked. Please don't ask how I know......let's just say it's 40yrs of experience.

*Ticket for "rolling stop" at stop sign
*Flat tire repair
*Time for walking back to highway to get a jack from passing motorist because little brother screwed with jack
*Tip for friendly passing motorist assistance
*New jack because little brother REALLY screwed up old jack
*Baseball cards to attempt to mend relationship with little brother
*Water
*Ice for water in ice chest
*New ice chest because old ice chest blew out of back of truck
*New smoker because you ran over old one in the dark
*22 hive tools
*Replace stolen hives
*Replace lost tops
*Replace rotted out wooden ware
*Replace vandalized/driven over hives
*Replace hives that you backed over
*Stamps
*Envelopes
*Insurance
*$7.00 gal. fuel purchase in BF Egypt because you forgot to fuel up in town
*Ham/cheese/mayo sandwich purchase from Middle Eastern owned mini-mart
*Pepto
*T-shirt replacement due to failure to bring toilet paper
*Shovel to bury t-shirt
*Spare toilet paper
*Dr bill for gastroenterology exam

INHALE

*Replace lost spare tire when cable failed
*Front wheel bearing on truck
*Burned out extractor motor
*Mouse poison
*Dinner for wife due to forgetting Anniversary

*and did I mention little brother misplacing tire iron............

You get the picture......it can and has been done, you can do it.......just educate yourself as best as possible.

Very best of luck to you young man.
 
#21 ·
Ben,

Your doing great, wish my kids had your gumption at your age.

- Get your self a valuable mentor, there are a lot of great commercial guys on this site, pick yourself one good one to listen to.

- Draw up a plan together for this next year, and then you execute that plan, reporting back to your mentor at least a couple of times a month.

As you learn you're planing will get better, and your execution of your planing will get better.

Good luck,

Don
 
#24 ·
I wonder if 50 lbs per hive at $2 per lb is a viable business. One deep super per hive of honey and selling at wholesale price????????

Follow your passion and get very good at and rewards will come.
 
#26 ·
Mr Semple makes a very good point and mgolden makes two of them (one subtle). 50 lbs per at wholesale is probably not viable (short of you running 1500 by yourself), secondly, if you sale retail (as he is suggesting) it would help bottom line. My whole point is, don't increase your anticipated average yield on paper because you "believe" you can....do so only AFTER you have proven to yourself you can do it on a consistent basis. Also, an increase in numbers will result in lower average yield per hive & higher % of shrinkage...there are benefits in other areas however.

Mr Brenner.....I'm headed off elk hunting ;) Ya'll have fun :D
 
#31 ·
Hi. You're 19. Wow, I wish I could say I was that age again. The plan is fine. More important is setting up a growth plan. Get yourself up to a semi load or two of bees as fast as you reasonably can. Borrow a little money, even if you don't really need it. Having a relationship at a bank may prove very helpful in the coming years.

If your dream is to retail your honey then do it. If not, don't do it.

You want to be migratory. So start NOW. Go get a job with a beekeeper where you're planning to migrate. Do it for a couple years then your off on your own.

ryan

P.S. Don't read beesource more than 15 minutes per year.
 
#33 ·
Gap insurance for honey is only 250 bucks. Go to FSA/USDA and inquire. It is 100% worth your time. Also, fumigillin is OK, but just feed honey bee healthy in your syrup. Haven't had an outbreak in years, and they actually like to eat it unlike the fumigillin I was forcing on them. And.. lesse. Someone else mentioned labor.. The numbers are conservative enough, but you need to consider that a crapload of them die every winter.
 
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