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  1. #1
    Join Date
    Jun 2012
    Location
    Dawson Creek, BC, Canada
    Posts
    171

    Default My Initial Business Plan - Please comment

    I have thrown together an initial business plan together and I am interested to hear some of your comments, especially fellow Canadians. I have 10 hives in the winter barn right now and will be buying 25 Nucs in May, and plan to exit with 50 hives. Average honey production for this area is ~ 150 lbs per year.


    https://skydrive.live.com/view.aspx?...Nu9mlclZlIE_nM


    Hopefully my link to the spreadsheet works.

    Thanks,
    Luke

  2. #2
    Join Date
    Jan 2013
    Location
    Midland OR. United States
    Posts
    96

    Default Re: My Initial Business Plan - Please comment

    Iv'e always said it only has to look good on paper. With that said I would suggest you do allot more research before you spend your money.

  3. #3
    Join Date
    May 2012
    Location
    Sacramento, CA, USA
    Posts
    2,695

    Default Re: My Initial Business Plan - Please comment

    I didn't see any insurance costs or taxes taken out, or you thinking strictly under the table sort of deal? You need a budget for repairs as well. Your expected income in honey I would say is spot on for 50 hives, it's about what I would expect anyway. I didn't see anything on painting or super assembly either, not that it would cost that much.

  4. #4
    Join Date
    May 2002
    Location
    San Mateo, CA
    Posts
    4,803

    Default Re: My Initial Business Plan - Please comment

    You can buy a bee truck for $3000? Did you include workshop/storage facilities? Tops and bottoms for $5? Assembly and painting labor? Other labor? pulling crop, extracting, bottling, returning wets, etc.? Your own wages?

  5. #5
    Join Date
    Sep 2005
    Location
    Greensboro, North Carolina
    Posts
    2,715

    Default Re: My Initial Business Plan - Please comment

    I don't know your area, so take my comments with a grain of salt if you don't think it is accurate, but here are a few thoughts:

    1. You have "Lids and bottoms" at $5.00 and you have budgeted for 50 of them. If you have 10 hives and you want to end the season with 50, you will need a minimum of 40 lids and 40 bottoms. I would suggest getting more, cause who knows if you'll need them. But, if you are assuming you can get a lid AND a bottom for $5.00 (or $2.50 for each) I think that is an unrealistic goal. $5.00 EACH, if you make it yourself, is doable.

    2. You have queen rearing equipment down at $300. What are you getting with that? You can get some grafting needles, some books, some cups, and that sorta thing for that (easy), but if you want to get that stuff and a dozen mating nucs, you might have some issues.

    3. You are increasing from 35 colonies (10 hives and 25 nucs) to 50 colonies, but you are only purchasing 10 queens. What happens if one of the queens isn't successful, or your own queen rearing isn't successful? Have you done it before?

    4. You have a bee truck for $3,000. I think that's dreaming. Trucks hold their value well. A small 10 year old Ranger with 120,000 miles goes for around $8-9k around here. I would suggest something larger than a ranger. At that price range, you'll likely end up with a vehicle that you are not able to use for anything.

    5. In my area, you can either use a colony to produce honey OR produce increase. Not both. Taking a 5 frame nuc and expanding it into two double deeps sounds about right, but while using all that energy to create increase and wax, I'm not sure if your minimum honey production is a great estimate, this first year at least. Assuming that 25 colonies will produce 100 lbs AT A MINIMUM over the season, in addition to the increase, in my opinion is optimistic. Certainly not the minimum.

    6. Your equity increase isn't calculated right. You have initial costs and expenditures (which looks right) as your starting value. Problem is once you buy it they aren't worth that. If you bought a super, some medications, or some buckets and tried to sell them a year later, you couldn't sell it for what you bought it for. Plus, some of those items (bottles, sugar, medications) will be used over the course of the year, and not added to any equity value you may have. So your starting value isn't really accurate. Then you have total value of honey and hives as your ending value. But, you already said you would have operating expenses of $5,650. That isn't put in your equity increase. If you take that out of your expenses from your honey sales, you get an equity increase of approximately 20% (based on my rough calculations in my head). That isn't including the devaluation of your assets from when you bought them.

    7. Last, you don't add in depreciation and repair anywhere.

    Other than that, looks good to me. Well thought out.

  6. #6
    Join Date
    Jul 2010
    Location
    Mansfield,Ohio
    Posts
    77

    Default Re: My Initial Business Plan - Please comment

    I have owned my own construction business for going on 30 years. I don't know alot about the bee business,I operate as a side liner I like to make money working with my bees but I do it because I injoy it. The one thing I can tell you is to be carefull because the things you don't count on having to spend money on will kill you in a business.

  7. #7
    Join Date
    Jun 2012
    Location
    Dawson Creek, BC, Canada
    Posts
    171

    Default Re: My Initial Business Plan - Please comment

    I should have given a little more back ground info... better late than never. Thanks all for the comments so far. This is a sideline business and a few thousand here or there is not going to break me, but I want to attempt to project costs and profits as close as possible so that as the numbers get bigger it doesn't break me. I have 3 boys that will help me with the labor, 14, 12, 9. (painting, extracting, and some bee work as they will each be getting there own hive(s).

    1. You have "Lids and bottoms" at $5.00 and you have budgeted for 50 of them. If you have 10 hives and you want to end the season with 50, you will need a minimum of 40 lids and 40 bottoms. I would suggest getting more, cause who knows if you'll need them. But, if you are assuming you can get a lid AND a bottom for $5.00 (or $2.50 for each) I think that is an unrealistic goal. $5.00 EACH, if you make it yourself, is doable.
    I build my own lids/bottom boards.

    2. You have queen rearing equipment down at $300. What are you getting with that? You can get some grafting needles, some books, some cups, and that sorta thing for that (easy), but if you want to get that stuff and a dozen mating nucs, you might have some issues.
    3. You are increasing from 35 colonies (10 hives and 25 nucs) to 50 colonies, but you are only purchasing 10 queens. What happens if one of the queens isn't successful, or your own queen rearing isn't successful? Have you done it before?
    Last year I was able to successfully raise 4-5 mated queens by cutting out swarm cells and relocating into hives or nucs. I have built my own mating nucs, but I want to start grafting focus harder on Queen rearing. I have put in some money for queens if my work is unsuccessful.

    4. You have a bee truck for $3,000. I think that's dreaming. Trucks hold their value well. A small 10 year old Ranger with 120,000 miles goes for around $8-9k around here. I would suggest something larger than a ranger. At that price range, you'll likely end up with a vehicle that you are not able to use for anything.
    I knew I would get hammered on this one. I have a ford 1/2 ton that will work in a pinch, but I am also looking at a whipped Cube Van with power tailgate. (looks like I can get a great deal, but thats not done yet.) Either way, this year if I need to make due with the 1/2 ton, so be it.

    5. In my area, you can either use a colony to produce honey OR produce increase. Not both. Taking a 5 frame nuc and expanding it into two double deeps sounds about right, but while using all that energy to create increase and wax, I'm not sure if your minimum honey production is a great estimate, this first year at least. Assuming that 25 colonies will produce 100 lbs AT A MINIMUM over the season, in addition to the increase, in my opinion is optimistic. Certainly not the minimum.
    This is the one the it all depends on, isn't it. Last year I had success in splitting 2 packages and one wintered hive into 10 hives. September's Honey crop was about 45lbs/hive, so I got really lucky. Last year I made a total of 700lbs. Now I now that drawing wax costs honey, and splitting bees costs honey. Perhaps I am a little optimistic or naive, I will reduce it.

    6. Your equity increase isn't calculated right. You have initial costs and expenditures (which looks right) as your starting value. Problem is once you buy it they aren't worth that. If you bought a super, some medications, or some buckets and tried to sell them a year later, you couldn't sell it for what you bought it for. Plus, some of those items (bottles, sugar, medications) will be used over the course of the year, and not added to any equity value you may have. So your starting value isn't really accurate. Then you have total value of honey and hives as your ending value. But, you already said you would have operating expenses of $5,650. That isn't put in your equity increase. If you take that out of your expenses from your honey sales, you get an equity increase of approximately 20% (based on my rough calculations in my head). That isn't including the devaluation of your assets from when you bought them.
    I need to think about this one some more, Ill get back to you.

    7. Last, you don't add in depreciation and repair anywhere.
    Good point.

    Hopefully this answers many of you guys' other posts and poiints. I will continue to refine and reflect. Thanks for all you effort for me!

    Luke

  8. #8
    Join Date
    May 2009
    Location
    Flora,IL
    Posts
    2,646

    Default Re: My Initial Business Plan - Please comment

    These guys have hit a bunch of details..... very well.. the one that hits me is the 150 lbs of honey is that gross or net? yielding 150lbs of EXTRA honey per hive would far excedeed the averages for all the areas I know of. Not to discourage the plan, but be realistic. I run 100 hives and make my own equipment. profits are not quite where your predicting for 50.

  9. #9
    Join Date
    Jun 2012
    Location
    Dawson Creek, BC, Canada
    Posts
    171

    Default Re: My Initial Business Plan - Please comment

    6. Your equity increase isn't calculated right. You have initial costs and expenditures (which looks right) as your starting value. Problem is once you buy it they aren't worth that. If you bought a super, some medications, or some buckets and tried to sell them a year later, you couldn't sell it for what you bought it for. Plus, some of those items (bottles, sugar, medications) will be used over the course of the year, and not added to any equity value you may have. So your starting value isn't really accurate. Then you have total value of honey and hives as your ending value. But, you already said you would have operating expenses of $5,650. That isn't put in your equity increase. If you take that out of your expenses from your honey sales, you get an equity increase of approximately 20% (based on my rough calculations in my head). That isn't including the devaluation of your assets from when you bought them.
    Here is what I was thinking: When I look to buy bees, I can turn 1 nuc into 1 hive and 1 nuc for next winter. When I look at Quality drawn out supers, they cost more than new price. (Drawing out these supers is my biggest concern regarding my honey production estimates.) Yes pails, excluders, vehicles, etc depreciate, but they are fairly small pieces in my plan and are not calculated in my value after year 1 figure. My equity value is calculated only using hives, supers and salable honey.

    Keep the thoughts coming,
    Luke

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