Getting Out: Is it always a losing proposition?

[Adam Foster Collins]

I'm not getting out myself, but getting in more and more: expanding. But having a conversation with a friend, he talked about how hard it is to get your money back if you sell out of beekeeping. He said you'd be very luck to make 50 cents on the dollar.

What are your thoughts?

Is it always a losing proposition?
Is the possibility of selling out a solid reason for using the most standard equipment you can?
Are there other ways to maximize your resale value as you build your operation?

Thanks,

Adam

[Mr.Beeman]

I'd say your friend is correct. It's not like corvettes where they actually increase in value as time progresses. Used equipment is a losing proposition unless you take into account the money earned (selling product) as well as personal satisfaction that was gained during the experience. Then, this way, you get your money back.
Your standard may not be someone else's.

[DamSutt1986]

Unless you buy smart and find good opportunities, I would think you will always lose money on equipment. If you buy out whole yards for pennies on the dollar compared to new, you may be able to make a profit some day.

[Oldtimer]

Learn how to breed queens. Take bees from some hives and make nucs and sell them, there is a good demand for nucs. Start selling one or two nucs this season, and keep selling them. When it's time to sell up altogether, you'll be quite familiar with selling nucs & you should, over a season or two, be able to break down and sell all your hives as nucs, and realise a good profit.

The key is that you have to figure out a way to breed a small number of queens as you need them.

[gone2seed]

I agree that selling out is almost always a losing proposition.There is one easy way around this problem.Don't get out.

[Nature Coast beek]

It's called depreciation.

[Mbeck]

It would depend how you do the math.
How do you value your used equipment and how you filled them with bees.

[alblancher]

We are all concentrating on equipment. How about his customer base, name and yards. That all has value, if it exists. The purchaser should operate the hives under the old name for a while as he moves any customers over to the purchasing company. His bees have value, if nothing else as previously mentioned make up nucs or entire hives and sell them as a complete deal, equipment and bees.

If the seller has a good reputation he should offer to help the transition, a little time during the transitition can make for a successful, more profitable deal. I agree if all you have is used equipment you'd be lucky to get 50 cents on the dollar.

[A'sPOPPY]

Learn how to breed queens. Take bees from some hives and make nucs and sell them, there is a good demand for nucs. Start selling one or two nucs this season, and keep selling them. When it's time to sell up altogether, you'll be quite familiar with selling nucs & you should, over a season or two, be able to break down and sell all your hives as nucs, and realise a good profit.

The key is that you have to figure out a way to breed a small number of queens as you need them.

My thoughts too. You saved me the time of typing.

[Adam Foster Collins]

Oldtimer - great point. If a person isn't in a sudden jam, needing to get out fast - then selling off woodenware with bees as nucs is a great approach to consider.

And Alblancher's point is good too. If you have a network of people that you know and the business relationships can actually facilitate the sale of your operation and the expansion or beginning of someone else's.

The thought came up when I was looking at an ad posted for a guy selling a bunch of gear, and he would only sell it as a single package for a single price - all or nothing. And it made me wonder about what the best approach to selling out was.

Adam

Adam

[Gypsi]

It's true of any hobby. Selling off gradually to the right buyers, the nuc idea, sounds like how to pull out without losing value on investments. It does mean continuing to work, rearing the queens and putting nucs together. But money's nice,.

[lazy shooter]

Like the above poster said, "it's called depreciation." If you have a fire sale depreciation drives the price, and I would be surprised to see fifty cents on the dollar. If one eases out of any business and sells to motivated buyers (nuc clients), depreciation is not a factor. Also, I see whole hives for sale. Rweaver sells a 10 frame deep that is full of bees for 370 bucks. It is a over wintered hive with all the bells and whistles. All one needs is another super to expand the hive. At that price, you can sell your wooden ware at a profit.

[sqkcrk]

Is it always a losing proposition?
Is the possibility of selling out a solid reason for using the most standard equipment you can?
Are there other ways to maximize your resale value as you build your operation?

Thanks,

Adam

Yes, imo, standard sized equipment has more of a chance of resale, better resale value.
Very few things appreciate in value making what you sell equal to or better than what you invested in them. You got your money back thru use.

I have a friend who sold his operation a number of times over the life span of his business, by selling equipment and bees and replacing them. But, in the end, when he sold the honey house, contents and hive he had a hard time of it.

[sqkcrk]

It's called depreciation.

Amen

[rainesridgefarm]

how you look at it depends on where you are. Buyers want the lowest price and sellers want the highest price. I went to a auction that the guy sold everything by the bee yard with supers on the hives. You could only buy the whole yard. this was when honey was about 1.05lb and he got $250 per hive in yards of 28-32. Some hives had 2 supers some had 5. You could go out the week before and look at each yard and decide on what one you wanted to buy. he came out smelling like a rose. He also put Min on the extraction equipment and the hummerbee and the bee truck

[alblancher]

Speaking of depreciation. You guys that sell honey how do you depreciate your equipment. Are hive bodies a 5 year write off? I guess extracting equipment has a longer life span Beekeeping is considered agriculture, can you write off the cost of bees in the first year? I ask this question because if the man selling the apiary has written off the equipment over the years then he can get pennies on the dollar and still earn a profit. If you do lose money on the transaction I believe you can carry that loss forward for a couple of years to offset any other income you have. I'm not a CPA but I AM always looking for a write off!

I wonder if it is better to write a check for yard rental then to trade honey for it. Writing a check is a deduction and is probably a small enough amount of money that it doesn't affect the yard owners reported income.

Sorry if this is too far off topic, I'm just an middle aged man getting ready to do his freaking taxes.

[sqkcrk]

Yes al, depreciation is based on value and longevity. As you say, hive parts depreciate faster than extracting equipment and trucks too. I don't recall the details. My accountant handles that.

I have no problem using honey as Yd Rent Compensation and writing off the expense.

[Russ]

Here is another to keep your costs down, make your supers and hive body's using using scrap lumber or reclaimed lumber. look in the dumpsters around building sites, Pallet material sometimes is good lumber and is FREE. Cuts your cost for lumber and the bee's don't care what the box is made out of. A lot of GOOD lumber is thrown away just because it has a nail or staples in it, a little of your time will fix that problem. Then if you decide to sell out, that is just that much less that you have to recover money wize. There is a lot of ways to cut expenses now days but people are used to living in a throw away society.

[shannonswyatt]

Free wood is like open source software, both are free if your time is worth nothing. You have to put a value on the time it takes for you to reclaim the free wood. It may be a good deal, maybe not, depending on how much time you have on your hands.

[Joel]

Almost all our processing equipment is used and most of we bought at a discount. IMO used empty wooden ware is not worth anything although if you were to sell out in the spring with good strong healthy hives in clean, painted equipment that can demand a premium price.

As to your friend - I've had 2 close friends who both ran mid level operations that got out. One beek got old and was very reluctant. The other frequently made road trips with me back and forth to SC and I think his getting out was harder on me than him because on many trips together he made the point there was never a cross word between us. Not during loading hives in the rain, 48 hour days, breakdowns, not once. He's happy as a lark now buying and building antique guns and whenever I mention dropping a hive off at his house in the spring he just says don't EVEN think about it.
Beekeeping is great but life has many roads and as I have choosen this one I know there are many others I might love and will never walk. At least not this time around.