# Opportunity of Purchase - Advice



## JSL (Sep 22, 2007)

What do you NEED from purchasing the operation? Honey contracts, equipment and bees, extraction equipment... It does not sound as though yards come with the deal, so you must determine what you need from the deal, calculate what the equipment would be new and proceed with negotiations. Yards have a value to a beekeeper and are not readily available for "purchase". The rest of items can be purchased. Prices are all over the board and based on what the seller wants and what the buyer is willing to pay. It sounds as though you have given this some thought and have experience. If there is no financial incentive for you to purchase the operation, you can easily grow your own operation.


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## jim lyon (Feb 19, 2006)

Nice perspective Joe. Yes, the question isn't what its worth but rather what its worth to you, the buyer. There is a "blue sky" element in purchasing a working bee operation. While you cant specifically "purchase" a location, you can include in any agreement a no compete clause which ideally would include the seller to introduce you to each landowner or contract customer as the new operator. There is a tax element to pricing the physical property and the no compete clause separately. What happens after the introductions is out of the hands of the seller with no guarantees. I think the no compete portion can be written off immediately but it would be best to check with a tax professional before finalizing the breakdown on the contract. If the seller only wants to sell it as a 'turnkey" operation then one could figure a low dollar price for the unwanted extras and shop them around.


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## Ian (Jan 16, 2003)

The simple thing to do is buy what you need. Buy his hives, sounds like a reasonable valuation, buy his boxes, solid equity in them. Take over his honey contract, worth mearly the handshake of his buyer. Buy the equipment you need from his extraction facility. 
Sellers just love putting a price on all the nick nacks around the farm to extract as much equity as they can. If he is approaching the sale of operation this way, show up to his retirement farm auction 

The only real benefit I see buying out an existing, other than the land, is his Beeyard territory. Usually land renters welcome new comers with the reference of the existing tenant


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## JSL (Sep 22, 2007)

Thanks Jim. I learned something new today... I was not familiar with with tax consequences/benefits of a no compete clause. No compete clauses and non-disclosure agreements can be intimidating to small business owners and transactions. Consulting a tax professional is sound advice, but from what little I could gleam from the internet... It looks like because a no compete clause is an intangible item that is should be amortized.

I tend to agree with Ian, buy what you need and grow you own business.


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## Riskybizz (Mar 12, 2010)

"Based upon personal experience are there really any pitfalls to buying another beeks operation"

27 years ago when we ran our commercial operation back in Virginia we used to buy bees from an older man Mr. Maxwell. We started out rather small for several years buying 100-200 colonies each spring. His established yards came with the purchase so we were very happy with the arrangement. We gradually built up our operation to 1500 colonies or so and that year Mr. Maxwell (then around 77 years of age) asked us if we wanted to buy him out. Long story short we agreed to purchase 1500 colonies of his remaining bees along with their locations. It was all we could afford. We were young upstarts at the time and pretty proud of ourselves that spring having "bough out" the old man. I remember him telling us that clearly it was time for him to slow down and downsize his operation. The territory that we were buying into was in Appomattox, Va. that was at that time very good sourwood country. As a matter of fact sourwood was the only honey that he extracted and sold. The following spring we happened to run into Mr. Maxwell again (in his new Chevy 1 ton flat-bed truck). He told us he always wanted a new truck but still had the old Chevy step side as it had served him so well for 22 years! He asked us how our bees had come through the winter and we told him great, and that we were making some spring splits and getting ready for another sourwood season. But what really shocked us was when he asked if we wanted to buy any more bees that spring. I remember very well that we kinda shook our heads and told him we were all set and that we had all we could manage. He kinda smiled at us and said that he'd just have to take care of his remaining 2200 hives himself all by himself again!!. Needless to say we felt a little foolish after that thinking that we had "bought him out"....once a beekeeper always a beekeeper.


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## beeware10 (Jul 25, 2010)

maybe one thought would careful about over extending yourself. right now the honey price is weak and the world economy could crash. look at the worst rather than the best. to myself the current asking price is too high for hives on the market. your experience is one thing you have going for you. Its hard to buy experience. lol


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## JSL (Sep 22, 2007)

Interesting story Riskybizz. Your deal came with yards and he still had bees. The original post does not come with yards. Kinda of makes you wonder... One never knows, just make sure the deal works for you financially and do the best you can.


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## JSL (Sep 22, 2007)

beeware10 said:


> Its hard to buy experience. lol


So true, but many are happy to charge you for lessons!


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## Ian (Jan 16, 2003)

World economy is always crashing, but I agree, manage that debt within your risk comfort zone


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## beepro (Dec 31, 2012)

After checking everything out to make sure
there are no bee diseases and all clean, offer him
half-price to buy it out. Get a feel of his reaction first and
then negotiate after that. Reading his facial expression should
give you an idea. Don't think of the market price
but only the local price. Ask him how many out yards he still
have for sale? It is better if you can take over his yards too. The
long term expansion is in your favor on top of everything you have now.
Once a beekeeper is always a beekeeper from that first bee sting!


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## Ian (Jan 16, 2003)

That's when you get kicked off the yard, better no offer than giving a insulting offer


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## jim lyon (Feb 19, 2006)

Ian said:


> That's when you get kicked off the yard, better no offer than giving a insulting offer


I agree, Ian unrealistic offers, like unrealistic asking prices, are real negotiation enders. Best to be upfront before valuations are even talked about and tell the seller that you are willing to make fair market offers for those things that enhance your operation but for those things that don't you would have to bid down accordingly.


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## Makin' Honey (Sep 13, 2010)

There are fella's that piece out each part of their business and want top dollar. Those I just walk away. The several times I have bought old fella's out they usually didn't want the hassle of piecing it out and they come off the price a good bit if I took it all (like 1/2 or less then new). Yes I bought some things I didn't need and I took on the hassle but each time it was worth it to me. I've never found it hard to sell off the unneeded stuff!


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## Roland (Dec 14, 2008)

Half of our bee equipment is inherited, and half is newer than 10 years. They are kept separate by yards, and the warehouse. All of our AFB and EFB problems are in the old equipment. You could not give me old bee equipment.

All stainless uncappers, extractors, etc., are of face value. They can be sterilized.

Crazy Roland


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## jean-marc (Jan 13, 2005)

Like others have said, pick up what you want and if the rst has limited value to you then price it accordingly. In all lkelyhood you can purchase it all keeping inmind that that you may want to sell the excess or limited use equipment off. You need some room for the effort of selling the extra stuff.

I always put myself in the other position. Would I be willing to accept such and such an offer if I was the seller? Does it seem fair and reasonnable? Would I sell if that person offered x dollars for this piece of equipment, these colonies? Take into account as many facors as possible then decide. You cannot expect somebody to take an offer tht you yourself would not accept. If it is fair who can complain?

Jean-Marc


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## WLeeH (Jan 16, 2015)

Thanks for the great replies folks. The one story is a bit scary that you bought a guy out and then he had 2000 hives the following year, though I can't imagine this guy doing that. His mobility isn't the best anymore and I just don't see that being an option for him without hiring some help, and I don't see that happening either. A lot to process and some good thoughts.


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## beepro (Dec 31, 2012)

I like you innocent thought.
How do you know if he doesn't has a son or a relative
close by? If he lives alone then there is no competition otherwise
be in for a surprise. Definitely ask him if there are other out yards
under his management.


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