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  1. #1
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    Jul 2012
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    Default Investment

    I have a friend that wants to invest as thousand dollars in some hives that I would fully manage. What would a good percentage that would be fair. The hive will be on clover about a away wiith mine.

  2. #2
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    Default Re: Investment

    The percentage depends on how you working it out with your friend. Just basic communication is the only way to
    find out and meet at an agreeable term. Until both talk then you would not know what are some of the thoughts on this partnership. Because both are taking the risk that there might or might not be a good return for that year. It is better to take your friend in with what you are doing as well. A show and tell would be good. That way when something happens then both already know how hard beekeeping is or is not. Always have clear communication so both will understand what are the expectations and obligations involved. It is not hard when the terms are put into basic writing because the human minds tend to wonder when things get a bit personal later on.

  3. #3
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    Default Re: Investment

    You doing all the work? What's involved? I would probably say 50% if you're doing it all. I would also make splits from them to increase your own stock as you see fit.

  4. #4
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    Default Re: Investment

    Best way to lose a friend, go into business with him or loan/borrow money.

  5. #5
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    Slidell, LA, USA
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    Default Re: Investment

    Is it basically a loan for you to purchase more hives, so you can sell more product and make more money? If that's the deal the question is what rate of return does he want and for how long. Do you guarantee that you will return the $ 1000 at the end of the agreement? If so you just need to beat the best return he can get on a comparable investment. Maybe 7 or 8% a year. If you decide to terminate the agreement do the hives and equipment belong to him? If he is not a beek or does not know a beek that will purchase the used equipment and bees from him he is out a grand. In that case maybe a 50% yearly return is a fair deal.

    As previously mentioned probably better to sit down and develop an understanding of what you are both willing to do and want from this "investment". Maybe all he wants is enough honey that he can bottle some with his own labels and give to friends at work.

  6. #6
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    Default Re: Investment

    I am very reluctant to do this with him. I am adding 10 hives myself without him (currently have three). We have been beating around the bush about it for a while. I was thinking about 80% on my end due to all labor and hour drive one way. I would be doing the feeding ect. including paying for the feed. If the hive does well and he gets 20% return its better than stock market. Key word IF. I am leaning against it myself.

  7. #7
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    Dec 2008
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    Phoenixville, PA
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    Default Re: Investment

    One grand will buy five hives if you're thrifty. Since harvest from first year hives is dicey, I'd pass. That's enough cash to cause problems, but far from enough to change your life.

  8. #8
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    Default Re: Investment

    Quote Originally Posted by camero7 View Post
    Best way to lose a friend, go into business with him or loan/borrow money.
    Not the best, but one of the better ways I will agree.

    ETA: I would not do this. Follow your gut instincts.

    Ed
    Last edited by Intheswamp; 02-06-2013 at 08:11 AM.

  9. #9
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    Default Re: Investment

    Quote Originally Posted by camero7 View Post
    Best way to lose a friend, go into business with him or loan/borrow money.
    Didn't Ophelia's father say that to his Son just before his departure for college. "Niether a borrower nor a lender be."

    Good advice camero.
    Mark Berninghausen "That which works, persists."

  10. #10
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    Default Re: Investment

    Thanks for all the input. I am not going to go forward with his investment. I did not need it and didn't ask for it, and again thanks.

  11. #11
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    Default Re: Investment

    Runaway! Runaway!

  12. #12
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    Auckland,Auckland,New Zealand
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    Default Re: Investment

    He can make a better, no hassle return on his thousand elsewhere.

    Over the years I've been approached by several people who want to invest money in bees but not do any work. Without exception they were wildly overoptimistic about what the returns should be.

    Beekeeping is tough enough without a money lender on your back.

    If your beekeeping really is profitable enough to give this investor the return he wants, plus profit for you, the work doer, then pitch in your own thousand bucks. Or if you just can't, it's most likely you will be better off at least stress wise, with 3 less hives, and without your friend keenly awaiting his returns.
    44 years, been commercial, outfits up to 4000 hives, now 120 hives and 200 nucs as a hobby, selling bees. T (mostly).

  13. #13
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    Feb 2011
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    Default Re: Investment

    I agree with the sentiments (and warnings) above.
    I DO, however, have one apiary where a couple of the hives are "owned/managed" in a shared fashion, and it has worked out well for the last couple of years.

    I had a friend/customer who bought/buys my honey to use in the production of his own end product. He had a prime forage location, and asked me if he bought some hives and put them there if I'd manage them for him. We talked about several alternatives, but in the end, here is what worked for US:
    He bought two complete hive kits from me (brand new, same manufacturer and same specs as I use. I bought them unassembled, put them together, wired the frames like mine, painted the boxes, and provided the stands - charged him just the "assembled" price as listed in supplier catalog). I also procured the nucs that we used to populate his two new hives.
    He also agreed to let me place a certain number of my OWN hives at that same location. This is only 10minutes from my office, so its convenient for me to go work them on a long lunch break... While I'm there inspecting, etc my hives, I work his two into the mix. When we harvest honey, he helps out, and we segregate his boxes from my own. He owns the honey from his hives, and I own the honey from my hives. If his hives don't produce as much honey as he needs for his business (they don't, nor will two hives likely ever produce as much as he uses in a year), he has first right of refusal on the purchase of the honey from my hives at that apiary. I just keep it stored and labeled independently of my other apiaries. Additionally, I store HIS buckets of honey and drop them off to him when he needs more.

    All in all, it works well for us. He gets to help and learn, he gets a source of honey that is HIS, I get an additional great location for some of my own hives, and I have a built-in buyer for the majority of the honey that comes from that apiary. We agreed that if HIS hives need anything (hardware replaced, treatments, re-queened, etc) that I'd procure and supply what is needed at cost. Last season I did end up moving a couple of frames of stores over to one of his hives from one of mine to help it out, but just did that as a friendly gesture as I would do for almost any friend or good customer.

    We both believe that time-permitting, he may be able to take over the management of his own hives in a couple of years (if his schedule allows it).

    Not saying that NOTHING could go wrong in the future, but since we both clearly expressed what our intentions and goals were, and talked about many potential hurdles in advance of this "partnership", we have not run into any speedbumps yet.

    Ralph
    "Teach your kids to hunt and fish, and you won't have to hunt for your kids"
    Four Ridge Apiaries www.fourridgebees.com

  14. #14
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    Apr 2012
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    Perth Western Australia
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    Default Re: Investment

    No a good idea. Only take on a partner if you really need them. In this case it appears to be only "CASH". If you need it, or he wants to help[ you or fund some bees, a loan may be the simplest. Anything else will require some accounting for all revenue and expenses which is extra work for you.

    I had someone I know wanted me to remove some bees from a second floor of a house. Someone said they could do it for a $1000 and he would be happy to pay me that amount. He was happy to pay for it so not to kill the bees. I said I admired his sentiment but bees are not really under threat in Western Australia. Unfortunately, was probably the best thing. I said for $200 I would set up a "Ray " memorial hive. He would get a bargain at that price.

  15. #15
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    Default Re: Investment

    Quote Originally Posted by swanson475 View Post
    I have a friend
    I wound not do it!
    The story line most likely will read in a couple short years..... I once had a freind.
    NUTRA-BEE feed supplements

  16. #16
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    Jun 2011
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    brownwood, TX, USA
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    Default Re: Investment

    First things first! There is what we want to happen and there is reality. Over a long business history I and others that I know have been stung by reality because we went into a business venture because we wanted the deal, (i.e. we wanted to be beekeepers). The "want to" led us into bad business decisions. Believe me, I have been there.

    Big businesses like General Motors and GE can exist on six to 10 percent net profit margins. Small businesses can't do this. Tending these hives and harvesting and selling products from these hives will take many days of your time. To pay for your time and expertise to manage someone else's hives you would need to make at least a couple of grand per year. A thousand dollar investment will not provide enough product to make this possible. If it did, we would all be rich.

  17. #17
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    Default Re: Investment

    All very good points DONT DO IT.
    Keep your friend a friend.

    Quote Originally Posted by jayoung21 View Post
    "The only ship that won't sail is a partnership" -Dave Ramsey. I wouldn't do it, especially if you're having qualms about it. What is he wanting out of it? Honey for consumption? just sell him some. Honey to repack with his label? Sell him wholesale. Bees? offer to mentor him and teach what you know.
    +1

  18. #18
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    Default Re: Investment

    Here is another thought that might work. It is not like a partnership but treating it like a honey for land type arrangement. I seen on the web that people will pay a fee to adopt a hive to be place in their own backyard or land of the owner and then allow you to access to harvest the honey and do hive management. They own the hive and land with the bees on their property but you do the upkeep and management without any restriction in access.
    Since he has the land, you might as well move 10 more of your own hives there since he is buying the hives with the $1000 dollars anyway. Now you have 20 hives to manage for the honey and expansion. Let him know that it is easier and more convenient for you to travel for the management and that any future expansion is possible at his land either yours or his hives. If he is flexible then you split 50/50 on the honey on his hives only and anything else you keep (this is your rewards) for your own expansion, assuming that honey is what he is after. If he want more hives in the future then be fair and ask him to invest more for hives expansion equipments. Let him know the costs too so he can think about it. If he cannot come to an agreement then might as well keep him as a friend. You think this is doable?

  19. #19
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    Dec 2005
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    Brasher Falls, NY, USA
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    Default Re: Investment

    Quote Originally Posted by swanson475 View Post
    What would a good percentage that would be fair.
    Percentage of what? Profit? Is he expecting a monetery return? Honey? Does expect to share in the hive bounty?

    Do you have a business plan worked up yet?
    Mark Berninghausen "That which works, persists."

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