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Thread: Investment

  1. #1
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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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    Mar 2011
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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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    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

    "I was thinking about 80% on my end due to all labor and hour drive one way."

    It is the 2 hour drive round trip that is what I am concern about. Been there and done it last year. Have you seen the gas price lately? I wonder if it has anything to do with the missing oil ship or not. Or because of the increased in demands in this cold Spring weather. Unless you have an electric vehicle, I think still cost a lot to travel. On active season have to monitor these hives continuously otherwise they will swarm. Not sure if the location is secure and all.
    Over here even a 20 minutes drive with unlimited lands for me to expand I still think it is too far away one way.
    And someone mention the friendships is more important, that he is hestitant a bit, and the first year return on investment is not that much. Maybe you can buy fully established hives and not the nucs or packages. To me a fully established hive is more stable but might cost you more.
    Also, if you're adding 10 hives of your own
    then the work load might be increased during busy seasons. If he not helping you then you will have another full time job. Have you consider from 3 hives jumping to 23 hives in one year? And all the other extra equipments needed to prevent swarming and expansion in case they needed to. Let's say conservatively you have 5 hives booming like crazy and going to give you lots of honey this year. Are you going to stop them from expansion or make more splits from them? Even if you put them in nucs you still need lots of equipments for the expansion/contraction. Now let's say if out of the 23 hives you have 10 that are booming then suddenly your equipments will double that amount or more. Going to cost more for the future investment thru out the year. Who's going to pay for the extra expansion then? More time to bug him to invest more then. If it is all mine then I don't have to concern a bit just expand or contract at will. Humm, investment with a partner is not that easy on honey bees that are so unpredictable yet. I know a farmer who has lots of lands and money to invest. The location harvesting honey every 2 weeks in the busy season. And also a friend as well. But will not bother (even when asked me before) simply because of the risk and reward involved. It is an investment after all that I don't think the investor will understand the losses (of a overwinter hive) unless they are beekeeper themselves.
    Time to take out the calculator and see....

  9. #9
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    Default Re: Investment

    "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.
    Jason Young

  10. #10
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    brownwood, TX, USA
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    Default Re: Investment

    A thousand dollars will buy three hives. The cost of operating an average, full sized automobile is approximately fifty cents per mile. Assuming a round trip of 100 miles the auto cost is fifty bucks per trip. If you make six trips per year it's a total of 300 dollars. Do you think there will ever be a profit for you or your friend? I don't think you will ever regain the initial investment.

  11. #11
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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 09:11 AM.

  12. #12
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    Default Re: Investment

    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 on all of that.

    I sure wouldn't do it if I were in your shoes. The type people I know who have a grand to invest are going to want to see a return pretty much immediately. What does he expect as a time of return on his investment? This venture is analogous to investing in farm/farmer and expecting specific results... You can't help the weather. Plus the time and expense of travel is a consideration. I think you might grow to resent the arrangement, and your friend might think that you're skimping on him if he doesn't truly understand the business of keeping bees (and what might constitute a realistic return). Just my $0.02.

  13. #13
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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.

  14. #14
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    Default Re: Investment

    Quote Originally Posted by lazy shooter View Post
    I don't think you will ever regain the initial investment.
    I agree.
    Like us on facebook This is the place to bee!
    Ralph

  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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    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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    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
    Squeak Creek Apiaries



  20. #20
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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
    Squeak Creek Apiaries



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