# Beekeeping family business structure question



## Bsweet (Apr 9, 2010)

Not the same situation as you, all my kids are grown but I have a grandson with an interest in bees. The plan is to pay for help and gift a couple of hives to get him started. If he hangs in and its not a fad then help him grow with splits and swarms. He is only 14 so he has time to grow both in body and apiary without debt. Guess it boils down to what works best for you as a family and the tax man. Jim


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## hpm08161947 (May 16, 2009)

An interesting thread. We are somewhat reversed from you, my son owns all the hives (400?) - he considers himself to be a big sideliner. This might not be possible if I were not out there assisting everyday... and I think he knows this. I am not worried about it though as I am retired and besides he nearly always buys my lunch. If I were not there as free labor he might have a hard time remaining a part-timer.
But if the situation were reversed and I had a young son who wanted to come onboard I would have to ask myself if I was large enough to support another mouth. At 400? hives we are not. Every operation is different and some places an operation that size just might be able to afford some help. But either way.... he would need to earn his share of the operation and this could well mean several years of very low remuneration... living at home... mom's cooking...etc. Most are not going to want it that bad, but if he hangs in their then he really has earned it and appreciates what he has.


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## Roland (Dec 14, 2008)

My son(6th gen beekeeper) and I run Linden Apiary as a Limited Liability Corporation. Talk with a good accountant, he can advise you on what is best. 

Roland Diehnelt
Linden Apiary, Est. 1852


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## fish_stix (May 17, 2009)

hpm08161947; You get lunch? He buys it? No way! I'm having a talk with that son of mine, tomorrow morning!


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## hpm08161947 (May 16, 2009)

fish_stix said:


> hpm08161947; You get lunch? He buys it? No way! I'm having a talk with that son of mine, tomorrow morning!


 Yea - Fish Stix... it's true! And on hot days... he will even buy me a drink. Come to think of it.... last christmas he gave me some nice goatskin bee gloves! Hoping for a new smoker for my bday.....


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## The Honey Householder (Nov 14, 2008)

I worked most of my summers with my dad, and made a hourly wage. At the age of 8 my dad gave me my first bee yard as a bonus. Then my eyes as opened I made more money from 20 hives then I did working for my dad all summer. Worked up to 8 yards of my own, then steped up to a 33% of the business then 50%. Run at 50% until dad and mom retirer, then I bought there share out. 
I have 4 boys and 4 girls and trying to fit them all into the business in one way or other. I was hopeing one of the older ones wants to work the bees. Looks like my best bet is my 4 year old.:thumbsup:


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## honeyshack (Jan 6, 2008)

Having been in the daughter in laws shoes here, i would like to offer a different perspective.
It is never too early to start with a succession plan. The plan should include all members of the family including the ones who do not want to farm. An exit stradgety for the parents is a must. An business including plan a must. With every so many years a bit more responsibility. For example, the books...very important. Get them involved in helping to compile the books. Then they know where and how the $ are spent as well business knowledge incase something happens to you or your wife.

There are several ways to go about this. If you are large enough to incorporate, might be the best way.
If your son wants to own his own hives, maybe the $ made and spent can be percentaged out. If he owned 40% of the hives then cost effective would be to pool resourses and assets to accomplish the goals of extracting, beek work and selling honey, but in the end, divide expenses and income accordingly.
Or keep separate books for his and your hives. Pay wages accordingly, just like if he were a hired worker.

The biggest thing is the succession plan. I have seen farms with no plans cease to exist. I have seen farms where the father writes all the cheques but controls the lives of the adult kids and grand kids....This is easy to do when the power of the cheque is left in the hands of the father...sorry to say.
I have seen where the farms splits, son and father, both help each other out but both charge each other for things. If father rents son's tractor, but son rents father's disc. Several times a year, things would be squarred away.
I have also seen where the father and mother control everything with the intent to hand to the son. However the daughters in the end want there cut, and want it now, sending the farm into a tail spin.

Then there is our situation. Far from perfect. But when hubby moved back with me in tow, his parents gave him a wage of 300 a month and 10% of the herd. He was required to pay 10% of the expenses. Each year the increase in the herd was given until we reached 50%. Up to this point things were alright. We did things their way. Hubby and i worked hard. Then we bought all the machinery and all the livestock from them and paid them fair market value for everything.
The problem with this was hubby's sister. Since she was left out of the knowledge of what was going on, and since she lived in the city. She had hard feelings towards us. She did not see us paying our way. She thought everything was handed to her brother, and she would be left with nothing. Alot of fights between us and parents. Not so much about money but about responsibility and them not letting go when we had majority.
If we had to do it all over again, I think we would move off the home yard site, on our own land, and get our own livestock right off the bat. We would share the work load, share the equipment, share the the expenses on shared equipement, but our cows and bees, our land and home, their cows and land and home. Then if something happened to our parents, we could care for our share of the expenses and access our own $ as needed.
I think we would all have sat down earlier and expressed all of our views and expectations. Get that succession plan in order because it can take awhile, especially with all the tax laws. Setting boundaries would be a good thing too...like knocking on each other's door before entering. Or boundaries on just life.
Lastly, communication is key for any business to succeed. Same in the farm family business. Communicate plans for the day, goals for the week, goals for the month or year. 
On a final note, give your son responsibility. If he is fixing the tractor, and if it's not done fast enough for your liking...let it go. Ask him if he wants help. Listen if he says no. And don't pick up the wrench when he leaves the shop to finish it...Let him do it. Let him have that sense of accomplishment.
More than what you barginned for---sorry


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## deejaycee (Apr 30, 2008)

Marvellous post, honeyshack. I completely agree. 

I work in a hort/ag consultancy and see similar stories all the time, though it's equally true for any family that owns a business or income producing assets. Succession planning is absolutely vital, particularly where there are multiple children involved. It might feel ridiculously early, but if the plan isn't put in place now it can end up destroying businesses and families.


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## Sweet to the Soul (Sep 1, 2010)

Thanks for all the great responses. 
Bsweet, I totally agree with growing without debt. It is a principle our family firmly believes in.

Roland - Your situation interest me, since you are a 6th generation family. I understand running as a LLC, but would you mind sharing how you involve your son. Is he a part owner or employee and does he get hourly wage or % of profit. In the 6 generations has there been a time when 2 children wanted to follow the family business? If so how did they work that out? It would be easy if I only had one son who wants to be involved, but that is appearing not to be the case in my situation.

HH - when you stepped up to 33% then 50% were you buying more equipment and adding hives or buying what your father already had?

Honeyshack - I agree with you on the family misunderstandings. I'm trying to come up with a plan now that will allow all to participate if they choose, but if they choose not to, then they will understand everything up front.


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## Roland (Dec 14, 2008)

WE are set up as an LLC , with my son and I each having a percentage of the business, much like shares. This is the beekeeping side of the family business.. 

I am an only son of an only son of an only son. His father had a brother that moved to Alabama after the Civil war. Their father was the only son to come from Germany.

My cousin runs the honey processing part of the business. You may have heard of Honey Acres? 

Crazy Roland


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## ryan (Apr 3, 2010)

Be careful paying each other a % of the profits. As you make investments and take depreciation the profit shown on your tax return can turn into a messy number. 

Working together is great. But that doesn't mean you can't run separate sets of books. The paper work lessons will be valuable to a young person. Good luck


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## The Honey Householder (Nov 14, 2008)

Kevin, 
I'm the middle of 7 kids and the only one that took any interest in the business. When I got married I worked in a 1/3 and Mom and Dad got 2/3. Then about 8 years later I worked into the business at 50%. I spent hours over the tablesaw as a kid cut frames, boxes, top, and bottom. A lot of the equipment I still work today, but having to start replacing now. We bought out 3 big operations back in the days too. The books was run that I had my customers and Mom and Dad had there customers. When I bought them out I took on all there customers too. 

Honeyshack, I feel for you! Been there done that. Had to step away from the business a season. Just glad everthing worked out.:thumbsup:


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