# Transition from hobbyist to Commercialist



## Beeslave (Feb 6, 2009)

Proper marketing and sales of the products produced from the hives.


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## jmgi (Jan 15, 2009)

>But what about the middle guy, or the guy with 25-50 hives? What does he do?

The answer to your question lies in your last paragraph. Oh, and one other thing, be the best beekeeper you can be.


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## alpha6 (May 12, 2008)

Hobby expenses are not tax deductible according to the IRS. With 50 hives you should be able to produce enough honey to service your local farmers market so with a little marketing savy and a few steps on the computer to register as an LLC with your state you are on your way from Hobbyist to side liner.


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## honeyshack (Jan 6, 2008)

The transition from hobbiest to commercial means you have to change your mind set. As a commercial producer your goal is to maintain the health of your bees to produce honey and or pollinate, and or sell quality queens or nucs. Every decision is penciled out. It's where the pencil meets the paper, a good eraser, and good and bad decisons are made. Every decision is dependant on whether or not that will cost or bring in a hopeful profit.
It is a transition in how you spend your money and how you market your product. No longer are you selling because you have extra, and wanting to make a little side dollars. You are pencilling your expenses to know where your profit/loss is. 
It is also a transition on how you view your bees. Bees go from being "the pets" to livestock. The view of saving every hive at any cost gets lost since your goal is to keep a business afloat. It comes down to knowing when to cut the loss on a hive. Instead of letting a hive hemorage $ bring down the profits, the decisions, hard ones will need to be made. No longer will bandaids suffice, in bee terms, one more treatment to get the hive healthy, just one more. Each hive will have a cost to it. Each hive will have to pay for itself or be culled.

So going from hobbiest to commercial is as much a mind set as an ability to get to 1000 hives, or maybe 100 hives or 500 hives.


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## Grant (Jun 12, 2004)

I found the best transition was to add hives in one year, then hold that level the next year. Every time I expanded, I needed a year to climb the learning curve. Once I mastered that level, I was ready to expand again, but the next year was spent learning how to master that level of production.

Also, my expansion followed the development of my markets.

Grant
Jackson MO


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## Steve10 (Nov 19, 2008)

A fun, but often sobering exercise is to pick the amount of money you want to make. Then work backwards inputting all the costs and time required to make that amount of money. The more research you put into the exercise, the better your chances of success. Work smarter, not harder! (Don't forget the tax man!)

The fun comes when you manipulate the expenses to show the profit. For instance, if you think you're a good honey salesman, you may find your pencil-pushing shows it's more profitable and less time consuming to buy wholesale honey and just package it yourself, while just keeping a few token hives for fun. On the flip side, say you feel you're a lousy salesman but you have a strong back and like working 7 days a week, then just produce as much honey as you can and sell barrels wholesale.

Bottom line - do an inventory of you own skills and weave them with what you really like about beekeeping.

Steve


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## Michael Palmer (Dec 29, 2006)

Specialkayme said:


> But what about the middle guy, or the guy with 25-50 hives? What does he do?
> 
> But it's too many hives to pay for it out of "hobby money." How does the middle guy make beekeeping profitable, if nothing more than just to recover costs?


I wouldn't consider 25-50 a middle guy. It's still a hobby at that point. That's ok. You can have fun and still make some money. You have an advantage over the larger producer. You can micro-manage each colony for the greatest production. You can develop customers that are willing to pay top dollar for the honey they buy...local don't ya know. You don't have huge production costs like most commercials do. 

Don't know what the average production is for your area of NC. 100? 70? 

70 lb avg, with 50 colonies for $5 a pound is $17500.
Winter 50 nucs. Use the best 20 in your apiaries for restocking deadouts and spring requeening. Sell the next best 20 @ $100 for $2000. Keep the last 10 for your supply of nucs in the current year.

Total sales of almost $20,000. Not bad for an apiary of 50 colonies that you could manage on weekends.


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## Allen Dick (Jan 10, 2009)

As you expand you run into the law of diminishing returns, but also economies of scale. At some point, you also run out of days in the week and have to streamline activities and drop some practices you thought were essential. You go from working bees by the hive to working bees by the yard and then district.


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## Specialkayme (Sep 4, 2005)

Michael Palmer said:


> I wouldn't consider 25-50 a middle guy. It's still a hobby at that point. That's ok. You can have fun and still make some money. You have an advantage over the larger producer. You can micro-manage each colony for the greatest production. You can develop customers that are willing to pay top dollar for the honey they buy...local don't ya know. You don't have huge production costs like most commercials do.
> 
> Don't know what the average production is for your area of NC. 100? 70?
> 
> ...


Keep in mind that I don't have first hand knowledge of this, I'm just going off of my experiences and research in the area, but I don't think those numbers work out the same when I calculated them.

70 lb avg per hive sounds good, but bulk honey sells for about $2.50 a lb (from what I have seen). I could get more, but then I have to pay someone to sit at the farmer's market, or I have to drive around to stores looking to sign a contract, of which I can't be sure that I can continue to supply. Then if I bottle, cost increases as I have to bottle myself. Sure there is more money to be made in selling bottles, the cost increases as well, and in starting off it's a cost I can't cover. All in all, if I"m doing this as a weekend thing, it would be more economical (at least to start) selling bulk. So that would be about $8,700 a year in honey sales (70 lbs, 50 hives, $2.50 a lb).

Nucs sell for about $85 for quality. Mine obviously wouldn't start off quality (I don't have much experience grafting queens, or having good drone areas), so it would probably have to sell for about $75 a nuc. Making $1,500 in nuc sales.

In addition, I don't have the land for the bees right now, nor can I afford to buy land off 'honey sales', so I have been using local farmlands, at the permission of the farmers. I tried to find farmers that could pay for it, but with tough economic times none of the small farmers can afford it, and the large commercial farmers want larger numbers, contracts, and only want the hives on the land for a certain time period. End of story, no pollination contracts.

Running those numbers, that leaves a (probably conservative) $10,200 a year in sales. That doesn't involve sales tax (although I could make the buyer pay for it) or income tax (which would be added onto mine, being taxed probably at about 20%, considering that it's the last dollar brought into my income), leaving me with about $8,000 a year. Then I need to replace about 20% of my woodenware a year (if less, great, but 20% is something you should probably rely on). At about $70 a full hive, that would be $700 a year, then there is gas involved, which I can't calculate.

All in all, that leaves about $7,300 in net profit for weekend work, or about $146 a week. If I'm working Saturdays, at about 10 hours a day, that would leave me with $14 an hour (although I could probably take SEVERAL weekends off ). Not bad, but the question remains where does that leave the guy with 50 hives, if he wanted to grow? 

At $7,000 a year, it isn't much to be putting back into the operation. Grow by perhaps 10 hives a year. At that rate, after 5 years he could double his income, leaving him with $14,000 a year. Then he could increase by 20 hives a year. Fast forward 30 years and you are ready to retire, making about $40,000 a year. Not bad in the end, but all along the way you have to work a full time job to pay the mortugage. He has no option but to do it as a side job, burning the midnight oil unless he wants to buy into 1,000 hives and go for the pollination contracts. The larger you go from 50, the more work is involved (multiple yards), while still having to work a normal 40 hour a week job.

The more I run the numbers, the more I'm thinking it just isn't possible without a business loan. Unless your experience tells me I'm wrong (which more often then not, I am).


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## sqkcrk (Dec 10, 2005)

You seem to be listing a number of reasons why you can't do what you seem to wish you could. So, maybe you shouldn't.

Business loan? Unless you are able to get a really low interest rate loan from the USDA/FSA, I wouldn't bother going that way. You will be in debt for a long time.

Do as Mike Palmer says and you will be alright. You won't make as much money as your neighbors, but if that is what you are judging yourself by you will always loose out. Go into beekeeping as a vocation because you want to live the life of a beekeeper. Otherwise, keep you 50 to 75 hives and enjoy working them and maximizing your "profit" by doing as Mike says. 

If beekeeping is the business you want to go into Study Business first or at the same time you Study Beekeeping. Keep your bees w/ a business mind.

Best of luck.


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## Allen Dick (Jan 10, 2009)

The problem with a business loan is that the money is easier to borrow than pay back. If the business does not generate a profit sufficient to expand while small, you certainly cannot expect to "make it up on volume as you expand. 

_Your greatest operating profit per hive will be with one or two hives and it will decline as numbers escalate._ 

At that small scale, capital expense is hard to figure, so most neglect it, but it becomes predictable and significant as hive numbers climb.


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## fish_stix (May 17, 2009)

Please tell us where you're selling for $2.50 a pound wholesale! Look at ABJ and Bee Culture for the current prices and remember that they vary up and down, usually down, an hour before you arrive with a truckload of honey.


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## Specialkayme (Sep 4, 2005)

sqkcrk said:


> You seem to be listing a number of reasons why you can't do what you seem to wish you could. So, maybe you shouldn't.
> Best of luck.


I apologize if I seem pessimistic, it isn't my intention. I'm just attempting to be realistic. All things considered equal, I would hate to enter into a business, either part time or full time, and have it end up not being profitable (under any scheme), sucking cash and putting me in the poor house. 

I realize it's possible with any enterprise, but with all business aspects it's necessary to do the requisite research and talk to individuals within the field. That is all that I am trying to do.

If Mike's advice appears to be the sound advice of the industry, I will take it. I'm not discounting his advice. I'm just running the numbers myself and they don't add up the same. So, I must be adding something up wrong. I'm just asking _what_ I'm adding up wrong, or discounting, or not accounting for.


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## Specialkayme (Sep 4, 2005)

fish_stix said:


> Please tell us where you're selling for $2.50 a pound wholesale! Look at ABJ and Bee Culture for the current prices and remember that they vary up and down, usually down, an hour before you arrive with a truckload of honey.


I've never sold bulk honey, I"m just going off of what I see adds for, researching internet sales, and the like.

I've found individuals that are selling one gallon for $40, five gallon buckets for $100. At about 12 lbs per gallon, that runs at about $2-2.50 a pound. 

Or are those numbers so off that I shouldn't be concerned with them?

I'm just attempting to take the lowest numbers into account. In accounting terms, it's conservatism. I would hate to rely on $5 a lb for accounting purposes, to end up getting $2 a lb and going bankrupt. So when I find the cheapest price around, that's what I account on. If I can sell it for twice that, I pour it back into the business. At least, that's what I'm thinking.


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## sqkcrk (Dec 10, 2005)

Specialkayme said:


> I apologize if I seem pessimistic, it isn't my intention. I'm just attempting to be realistic. All things considered equal, I would hate to enter into a business, either part time or full time, and have it end up not being profitable (under any scheme), sucking cash and putting me in the poor house.
> 
> I realize it's possible with any enterprise, but with all business aspects it's necessary to do the requisite research and talk to individuals within the field. That is all that I am trying to do.
> 
> If Mike's advice appears to be the sound advice of the industry, I will take it. I'm not discounting his advice. I'm just running the numbers myself and they don't add up the same. So, I must be adding something up wrong. I'm just asking _what_ I'm adding up wrong, or discounting, or not accounting for.


I understand, believe me, I understand. I go through this all of the time within my own mind. You have to keep bees for reasons other than making good business sense.

There is an old adage about winning the lottery and keeping bees until the money runs out. There's more truth to that then most beekeepers would like to aknowledge.


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## sqkcrk (Dec 10, 2005)

Specialkayme said:


> I've never sold bulk honey, I"m just going off of what I see adds for, researching internet sales, and the like.


One thing you need to know about anecdotal information, which is what you are talking about and what is found in the Journals, has little to nothing to do w/ what you or I can sell honey for. Call every bottler that you can find, Soiux Bee, Dutch Gold/McLure's, etc. and poll them. They will tell you what they are paying for honey by the grade and in barrels. That is the price of honey. Sure, there are some folks who can and have sold honey for more, but how much?


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## chillardbee (May 26, 2005)

Specialkayme said:


> All things considered equal, I would hate to enter into a business, either part time or full time, and have it end up not being profitable (under any scheme), sucking cash and putting me in the poor house.


Ahhhh, but such is the case in everything to do with farming. No one can forsee there success of failures in an industry that involves the roll of the dice. The key word being 'IF', if your bees survive the winter, if the bees are strong enough at the honeyflow, if there is a honeyflow, if you do get pollination contracts, and the list of variables go on. It's tough enough on established beekeepers to go through losses but think of the poor fella who has just morgaged out his home to get into the industry.

I'm still increasing my business myself. I was working a full time job and running my 100 colonies on the side comfortably. I think I could still run 300 hives while working there. The plan for me is to allow the bees to pay there own expenses and build up costs. And GOD BLESS all ye who doth have a WIFE with a second income. 

Our goal is to get to 600 hives. How long will it take us? It depends on those variables I spoke of earlier.


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## jmgi (Jan 15, 2009)

>I'm just attempting to take the lowest numbers into account. In accounting terms, it's conservatism. I would hate to rely on $5 a lb for accounting purposes, to end up getting $2 a lb and going bankrupt.

Honestly, if you want to be conservative about honey prices, I wouldn't figure on getting any more than $1.50/lb., unless you plan to get some retailers to take some, but it would be a small percentage of your crop I would think. You may be able to find plenty of businesses to sell to without signing any kind of contract, you won't know for sure unless you get out there and peddle your product. Local health food stores, farmers markets would be a good place to start.


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## Specialkayme (Sep 4, 2005)

[

Not a bad point. I won't know what I can get for honey until I try. But, before I try I need to accumulate a bit of a supply. Not alot, but enough that if I set up buyer, and they want more I won't have to say "wait till next summer." Hopefully I should have that by the end of spring.

Personally, right now, I can only move as fast as is feasible. For me that means I'll do as many spits as is feasible, using up as much if not all of the woodenware that I have. From there I will try to sell my honey for the best price that I can. Whatever profits I can make, I'll put back into woodenware (and possibly nucs or packages next year, although probably not many). The name of the game is slow progress.

The whole point of this thread is that I was trying to get a picture of what the next five moves would look like. As in chess, you always think a few moves ahead. But, the more I realize, the best I can really do is making the most of the supplies that I have right now.

I'm still open to suggestions, comments, or concerns though.


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## Countryboy (Feb 15, 2009)

A hobbyist sells the surplus they have to whatever market they can find. If they have a little extra honey, they try to sell it. If they make a couple nucs, they sell them.

The commercial guy finds/develops the market they want to cater to, and they allow the market to dictate how they develop their business model.

For example, the commercial guy decides he wants to go into honey production, or nuc production, or pollination, or queen rearing, etc. Then he makes business decisions to maximize his profits for which area he enters. 

If you can't decide which area you want to do, you will waste tons of time and energy and equipment playing around. As Allen Dick has said, it is easy to waste 80% of your time on the 20% of you hives which are unproductive, while you neglect the hives that will make you money.

Going from hobbyist to sideliner/commercial, you have to be able to read your market, and then be able to focus your efforts into what makes you the most money.


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## jjgbee (Oct 12, 2006)

In my area, I had to move the bees at least 4 times a year. I started fast in a few really good years. At about 60 hives, I knew I would need a flat bed to make the bees profitable. That was one big step. I built my own hive loader which can be very expensive. Or a fork lift and trailer. New truck, used truck? Are you a welder/mechanic? I went used at first and hand built most of my equip. Got a truck, now double hives to get 2 truck loads, I averaged over 200lb per hive. Now you need a fast extracting facility. More bucks. Again, can you build and maintain it yourself? Honey price? After 25yrs, I sell about 6,000lb year out my door at $3.00 lb in bulk containers and non-filtered barrels of honey at $1.30 lb. When operating 250 to 300 colonies, you don't have time to stand around a farmers market selling $5.00 lb honey @ 4 lbs per hr. I started with 50% used equipment and this was back when we had no mites or CCD. One good wet year produced 60,000lb with 240 hives. Of coarse I only worked 16hrs a day 7 days a week. Good Luck!


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## Specialkayme (Sep 4, 2005)

I just contacted Suebee, inquiring as to what they would be willing to pay for honey. They were very nice and informative. After a lengthy explanation that price depends on supply that's available, and on the time of the year and what international situations are happening, he told me "Domestically, prices for white honey were in the $1.30-1.40 range in the fall but we are now hearing reports of honey prices in the $1.45-1.60 range."

So, after hearing that, I'm just curious where you go to get $5 a lb?


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## hpm08161947 (May 16, 2009)

Specialkayme said:


> So, after hearing that, I'm just curious where you go to get $5 a lb?


The Raleigh Farmers Market - 1 bottle at a time.... should be able to do better than 5 unless you want to sell out quick.


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## Specialkayme (Sep 4, 2005)

hpm08161947 said:


> The Raleigh Farmers Market


Which just brings me back to the same point. If I have a full time job, I can't sit at the farmers market. I would need to pay someone to sit there. 

If I paid someone $10 an hour, if they sold 3 lbs an hour, I would make $5. If instead I could find someone to wholesale to for $2 a lb, I would walk away with $6. Selling wholesale doesn't involve me getting the cash to pay a worker upfront, while the farmer's market does.

Eventually, that would be great. But starting out, it just doesn't make fiscal sense to hire someone and put out the capital up front for a product you can't ensure will sell profitably.


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## sqkcrk (Dec 10, 2005)

Specialkayme said:


> But, before I try I need to accumulate a bit of a supply. Not alot, but enough that if I set up buyer, and they want more I won't have to say "wait till next summer." Hopefully I should have that by the end of spring.
> 
> I'm still open to suggestions, comments, or concerns though.


You plan on having enuf honey for a buyer by the end of spring? Is that what you stated? So, you are planning on buying honey this spring? Or is that when honey is produced where you live?


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## sqkcrk (Dec 10, 2005)

Specialkayme said:


> But starting out, it just doesn't make fiscal sense to hire someone and put out the capital up front for a product you can't ensure will sell profitably.


I think you understand this part quite well. Did you poll any other packers?


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## Specialkayme (Sep 4, 2005)

sqkcrk said:


> You plan on having enuf honey for a buyer by the end of spring? Is that what you stated? So, you are planning on buying honey this spring? Or is that when honey is produced where you live?


Honey is usually produced at the end of April. I do not plan on purchasing any this year.



sqkcrk said:


> I think you understand this part quite well. Did you poll any other packers?


I have, but I haven't received any responses as of yet. 

Suebee provided me with USDA statistics on honey prices. I feel that his offer, while not the best, was probably the most accurate. But we will see whenever I get other answers.


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## sqkcrk (Dec 10, 2005)

How much honey do you project that you will produce this season? What color and floral source? Buckets or barrels?


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## Specialkayme (Sep 4, 2005)

I currently only have 5 hives (I know, I'm still a Hobbyist).

I hope to create 350-500 lbs of honey this season. Buckets.

I also plan on using as much, if not all of the profits from it to increase numbers. I've already planned on increasing my hives to 15-25 by the start of next year.

Hopefully, within two years I will have 50-100 hives. We will see how it works though, as you can only grow as fast as the individual can handle.

My concern isn't so much creating profits right now, as much as it is to offset the cost of maintaining the hives. From that point, I'm hoping to make it profitable (if only a little bit) within three years.


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## StevenG (Mar 27, 2009)

So when we talk about getting $5 a pound at a farmer's market, is that net, or gross? deducting cost of the jar and label would reduce our take-home. And then we've got to calculate the value of our time labelling, bottling, and sitting there selling. I don't mind the labelling, bottling, and selling, but I want to be sure to deduct my costs.


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## Buffalolick (Jan 26, 2010)

I am somewhat in the same boat, as I would like to see a profit someday from my hobby. I don't plan to make this a full time gig, but who knows.

Making the jump from hobby to bulk producer, competing solely on price, seems much harder and riskier, and less likely to be profitable than bottling your own, developing a market and a brand, and selling at a premium price. Just my 2 cents. I wish you lots of luck. Whatever you do, don't borrow any money! The borrower is slave to the lender.


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## Specialkayme (Sep 4, 2005)

Buffalolick said:


> Whatever you do, don't borrow any money! The borrower is slave to the lender.


Lol, with $150k in student loans, a mortgage, and some credit card debt, I know all about borrowing money. I'm done with doing that for the rest of my life! Other than the next house mortgage, perhaps.


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## Kieck (Dec 2, 2005)

To me, the biggest hurdle in all of this may just be the transition period. What I mean: managing 25 hives is quite manageable on an "evenings-and-weekends" basis, but running 200 hives seems like quite a different matter. The crux of the matter lies in the period where a beekeeper has too many hives to manage just on evenings and weekends, but not enough to devote full time to running hives.


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## doc25 (Mar 9, 2007)

And then there is the expense of going from 200- say 400 or more in a year.


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## be lote (Mar 26, 2008)

first thang you gotta no is there is money in beekeepin. 
reason i no this is cause its mine.

surplus honey aint a given every year.
if you increasein your hives to 25 this year you plan on feedin
this winter. 
i rent mine to myself for polinatein. i run numbers in my head so much 
that i think im cheatin myself.


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## indypartridge (Nov 18, 2004)

Countryboy said:


> The commercial guy finds/develops the market they want to cater to, and they allow the market to dictate how they develop their business model.
> 
> For example, the commercial guy decides he wants to go into honey production, or nuc production, or pollination, or queen rearing, etc. Then he makes business decisions to maximize his profits for which area he enters.
> 
> ...


This is dead-on! Let me give you a few examples of beeks I know:
1) An Amish beek has a handful of hives and sells over 6 tons of honey a year at premium retail prices. He's in a high tourist traffic area, so he capitalizes on that. He buys honey from several local beekeepers and sells it in his Amish store which has a few hives out back for effect. 
2) Another beek I know focuses on "local" nucs and queens. He sells hundreds of each every year. He's also a local distributor for Mann Lake and Kelley.
3) One beek who influenced me to get into beekeeping runs about 500 hives and has spent years building up a large retail network. His honey and honey products are all over the state. Even major grocers have his products - NOT on the shelf with other honey, but in a special display in the produce section featuring honey, pollen, marianades, sauces, etc. He's at fairs and farmer's markets. Yes, he pays someone to go to these, but he's moving enough honey to make it pay.

Read Countryboy's post about five more times - there's a great deal of wisdom in it.


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## Grant (Jun 12, 2004)

Buffalolick said:


> I don't plan to make this a full time gig, but who knows. Making the jump from hobby to bulk producer, competing solely on price, seems much harder and riskier, and less likely to be profitable than bottling your own, developing a market and a brand, and selling at a premium price.


This comment struck me like a 2x4 !

In my fantasy world, I'd like to make my beekeeping a full-time gig. I'm four years from being able to "retire" (and begin pulling on my pension, though it would be less than if I waited until 65). My wife continues to remind me we have kids in college and I'm under orders NOT to quit my day job.

I have often wondered why the commercial guys don't retail more honey to get the better price. I thought bulk honey was rather inefficient.

However, now that I'm expanding, the time crunch is the crux of the matter. When I'm set up at the farmer's market, my mind wanders to the hives I need to be checking. When I'm with my bees, my mind wanders to the bottles I need to fill and label for the farmer's market. Maybe bulk honey isn't such a bad way to go.

There's only so much time in the day and sooner, rather than later, I sense I'm going to need to decide which way my enterprise is going to go....or I quit my day job and reap those repercussions. I'm still a one-man operation and I'll work the evenings and off-days. I've never worked a 9-5 job, but I'm beginning to think I need a 48-hour day to do all I want to do.

If there is any good news, I find that as I expand, I get better and more efficient at hive management. I've learned to keep better records so I know what's going on in my hives and what I need to be doing. I've also learned to be a better manager of my time, my work and my family obligations and commitments.

Maybe cloning holds the answer.....

Grant
Jackson, MO


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## ga.beeman (Mar 29, 2009)

to go from 5 hives to 100-150 in two years is a big jump. As it has been said in other post it is much better to let the bees grow the business instead of getting a loan. the way the honey flow has been in the south the last few years there is noway i would borrow money to expand. if you move your bees around and chase the flows here in the south you can make alot more honey if everything is right, if is wrong you have all the expense of moving bees and no honey are very little. things are not like they where years ago. if you want to grow your business i think you should try and grow bees to sell in packages or nucs and let the honey be secondary. to raise bees you are going to need to move your bees south or east closer to the coast. that way they can build up alot earlier and you can have them for sale when people are ready for them. really think hard before you borrow money to build your business. Good luck on which ever way you go....David


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## Batman (Jun 7, 2009)

Well since like a lot of you, this goes through my mind constantly. With all the rain and weather we have had in my area my mind wonders constantly. Would I like to make $10,000 + playing with bees? Sure! Will I? Doubt it. Am I trying to make a little $? Of course! Will I? Maybe someday. Last year, I spent over $1300, traveled almost 2000 miles, and sold just under $300 in honey. Sure, I would love to get this $150 per hive I hear about for Almond contracts, but I realize that this may just be a pipe dream. I will continue to grow my colonies, but I have no magic number of 'how many hives' I want to have. As they did say, figure out where you want to be, what you want to do, then design a plan to get there. That is what I am working on. When I started keeping bees, it was a hobby, something to do, something I enjoyed. I looked forward to looking in on my bees. When I was at my REAL job, I enjoyed talking about them and could only look forward to my next day off so I could go check on them. I couldn't and still can't get my hands on enough information. Last week when I dropped a hive off at my Dad's house, after I opened the hive up I sat about 5 feet away and just watched them for about 1/2 hour. I probably could have sat there all day, if it wasn't for the phone call that pulled me away. I don't ever want to lose that enjoyment that I feel watching them. Sure, I want to make some $, but not at the expense of losing the tranquility that I felt just sitting there watching them. I had people last year telling me "when you start selling honey, I want to buy some". I thought cool, I have people that want honey and I don't have any yet! When I started bottling honey last year, I had $ bills in my eyes. I bottled almost 100 bottles. I sold a few here and a few there, there wasn't enough for me to run down to the farmers market and set up a tent, or pay the fees to do so. We also have a BIG flea market here in the lil ol town of Galt, but once again, set up, site fees, etc...not justified. But as I still sat on a bulk of my honey, I was like crap, will I sell all this? The REAL apiaries were selling their bottles for $7-8 per bottle that was the same size I was struggling to sell for $5. The best way I started selling bottles was to carry a toothpick, and a sample bottle and let people try it. When they asked how much, I told them $5 per bottle or 5 for $20. GONE! I was outta honey in 1 week! I had people coming to me after trying honey I had sold other people wanting some. I have other, unpaid people selling my honey for me, word of mouth, that's the best advertisement there is! No cost. So I need to grow in size some, since I still have people coming and saying "I want some honey" or "I need more", which is followed by my reply of "I don't have anymore, not til Sept/Oct." I love hearing the disappointment in them. Will I be quitting my day job anytime soon? Nope. Do I need to build up some more colonies so I can just continue? Yes. I know where I want to be, plan is developed, now to put it to work. And maybe, next year or the year after that, I will see a little profit.

Good luck to you.

Craig


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## peacekeeperapiaries (Jun 23, 2009)

keep splitting hives, buy a few more nucs or packages when you can, build your own boxes lids and bottoms, buy used equipment as you need it and buy bigger than you need right now think 3-4 years down the road. Build a plan and slowly work towards it. STAY DEBT FREE, no loans. Once you hit 20-30 hives your colony numbers boom just off splits, but the costs also go up in wood materials and time. I have a day job and my days off are ALL bee days, come to think of it every morning before work is a bee day also , but I do have the benefit of my my dad/partner who is a semi retired contractor (no business with this economy) and has the time to pick up my slack and get the important stuff accomplished while I still go to work. To many variables for me to go out on a limb and borrow money, we grow it cash and own everything. Good luck.
steve


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## Buffalolick (Jan 26, 2010)

I see a common theme...just like many many other types of farmers...lots of beeks hold a "day" job in addition to running the bees.


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## alpha6 (May 12, 2008)

You gotta pay the bills somehow!! One day it will pay...or at least that's what I keep telling myself.


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## sqkcrk (Dec 10, 2005)

Specialkayme said:


> I currently only have 5 hives (I know, I'm still a Hobbyist).


By the way, where did you get the term "commercialist"? I've never seen it before.


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## sqkcrk (Dec 10, 2005)

Specialkayme said:


> Lol, with $150k in student loans, a mortgage, and some credit card debt, I know all about borrowing money. I'm done with doing that for the rest of my life! Other than the next house mortgage, perhaps.


In an article that was presented to us in our Small Business Course, the author said that any business owner that wasn't willing to mortgage their home to invest in their own business wasn't very confident in their future and probably not someone that a bank would want to loan money to.


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## Specialkayme (Sep 4, 2005)

sqkcrk said:


> By the way, where did you get the term "commercialist"? I've never seen it before.


I guess I made it up. Easier than saying "An entrepreneur" or "An individual that works in the commercial industry."



sqkcrk said:


> In an article that was presented to us in our Small Business Course, the author said that any business owner that wasn't willing to mortgage their home to invest in their own business wasn't very confident in their future and probably not someone that a bank would want to loan money to.


Well, that all depends on the investor. Banks could probably care less. The debts of the business in a sole proprietor are the debts of the individual. There is no difference, so the bank can go after your house either way, if you mortgage it or not. With an LLC the liability ends at the company, unless you bring in your house. Sure the bank would want it, but the whole point of the LLC is to limit them from getting your house, so they probably don't blame you for it (and most of these people have MBAs, Masters, or J.D.'s, so they know the advantages and disadvantages of each). 

Venture Capitalists however may have a differing opinion. To them it's not a capital issue, it's a confidence issue. Most of them arn't willing to put in $10,000 unless you have exhausted your resources. It's a strategy to ensure that they don't invest in a failing business. But I highly doubt any venture capitalists would be interested in investing in a commercial beekeeping operation, unless they got their hands on a new patent or something.


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## sqkcrk (Dec 10, 2005)

My point was, that if you aren't willing to go into debt, mortgage your home, then you are saying that you don't have faith in your profitability.

The term that I prefer is "commercial beekeeper". A "commercialist" is someone who designs and produces commercials. hardy har.


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## StevenG (Mar 27, 2009)

When I lived and worked in farming communities, the long term successful farmers were the ones who took it slow, and didn't mortgage themselves to the hilt. The ones they ended up buying out were the ones so confident of their profitability that they mortgaged themselves to the hilt, house and everything. Bad years hurt everyone, but especially those who are mortgaged... It isn't necessarily related to confidence, but an understanding of the realities of "farm life" and "weather".... fwiw.
Regards,
Steven


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## Roland (Dec 14, 2008)

"A man has got to know his limitations" confidant or not (Dirty Harry quote?)

Roland


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## sqkcrk (Dec 10, 2005)

You forgot the "punk".


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## Batman (Jun 7, 2009)

Specialkayme said:


> Lol, with $150k in student loans, a mortgage, and some credit card debt, I know all about borrowing money. I'm done with doing that for the rest of my life! Other than the next house mortgage, perhaps.


I hear ya there, cept you forgot the car loans too. Practically have to get a loan to get a car these days. Sadly, I don't think my bees will ever make me enough money to pay for a new Camaro, or even make the monthly payment on one. How bad is that, they dedicate their lives to make honey and all I care about is the $. :shhhh:



alpha6 said:


> You gotta pay the bills somehow!! One day it will pay...or at least that's what I keep telling myself.



Ahhhh, the dream.


Craig


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## Cascade Failure (Feb 4, 2010)

sqkcrk - I tend to disagree with the idea that if your aren't willing to risk your home you can't be profitable. Risk vs. reward and all that.


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## loggermike (Jul 23, 2000)

During the 'Boom' lots of people mortgaged their property for their businesses .Now that we are in a 'Bust' it doesn't seem like such a great idea.
I can still recall my Dad telling me how his Dad lost his farming business in the Great Depression and the penniless trip to California to find work, ANY work.


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## Allen Dick (Jan 10, 2009)

> the long term successful farmers were the ones who took it slow, and didn't mortgage themselves to the hilt.

I couldn't have said it better. The astounding thing was I saw situations where their kids went off to ag college and returned to run the farm (which had been in the family for generations sometimes). Within a few years the place was up for sale.

What nobody seems to realize is that projected income is only a maybe, but money spent is gone and may never come back. When everything looks rosiest is exactly when things cannot get better.

That is not to say that borrowing operating money is not necessary sometimes, but borrowing short term money against asset values is a mistake that is easy to make.


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## USCBeeMan (Feb 7, 2009)

Have enjoyed this thread. I have been running the beekeeping for profit around in my head all of last year which was my 2nd year (1st after a winter). Came into year 2 with 4 hives. Purchased 4 packages (lost 3), puchcased 1 nuc (lost in Jan), 3 or 4 splits, had at least 25 swarms, 3 trapouts and 3 cutouts.

Now that sounds like I really am a comer. But at this moment have 14 hives and I think I will still have 14 in April. I am purchasing 2 nucs. I will probably make a couple of splits. But I need to recover a lot of expense from last year. You can't go from 4 hives to almost 30 at any given moment during the summer without a huge cost in materials.

So my plan this year is to take advantage of all the comb I have from the lost hives and use most of it for honey production. Especially since last year's nectar flow was almost nothing. I feel certain I will get swarm calls. As many as last year, depends. Had a lot of rain. Think that caused the huge amount of swarm calls last year. Will get some cutouts probably. I can make money on those. Have several trapouts already lined up and I will get paid for 1 of them. Have a dead tree with a hive to cut down. Will get paid to drop the tree and take the bees so that will be a little bit of income. 

I really love beeking. It's as if I have found my niche. It's something that has gotten to me. Because of that I made a lot of choices that were not correct. Heck, look at the numbers I stated above. Look at the learning curve I went through. Cutting losses is the key. I couldn't get to that point in my head. My heart said save all of the bees. But you can't and shouldn't. I know that now. 

TN Ag Dept has a program where they will pay 50% of the cost of purchasing Beek equipment, including trailers to move hives, honey production (extractors, etc) up to $30,000. $15K from me and $15K from the state. So it will look at that and try to make some good return on investments with the program but have no plans to try and match a lot of money. Maybe $1,000 or so at the most.

As far as the honey. It will sell itself. Local trader papers, free paper adds, word of mouth, and a sign in your yard. The same goes for the wax.

Now my questions.

Am I on the right track?

I am 57, am I getting to old to get into the business? I would like to be at a point to own several hundred hives.


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## Batman (Jun 7, 2009)

Wow, I think I want to move to Tenn! So I would have gotten $1300 in help last year. Calif. to my knowledge doesn't have ANY programs like this, we're too busy giving illegals free healthcare, food stamps and $ to send back home so more can come up. As a small start up business, that really would have helped out. After bring home a swarm of bees INSIDE my wife's Tahoe last year, I decided that I really needed to register my truck that I had filed non-op the year before when Calif decided to double the fees for DMV while at the same time decided to cut my check by 15% since I am a state worker. The wife wasn't too keen on me taking the Tahoe again since just after I got home and took the newly aquired swarm out of vehicle, they had chewed their way out and were starting to fly. If that would have happened while they were still in there??:lookout: I'm not sure if she was mad because that could have happened or if it's because I went swarm chasing on her 40th b-day??:scratch: (It's ok, she told me to go, we did her b-day party the day before, I was cleaning the pool when the call came in).


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## Batman (Jun 7, 2009)

USCBeeMan said:


> I am 57, am I getting to old to get into the business?



57 too old? Not to my knowledge, I have heard the AVERAGE age of beeks is in the 60's


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## USCBeeMan (Feb 7, 2009)

I know 57 isn't old and I don't feel old. It's just that I don't know how long it takes to get to a point where I would like to be with several hundred hives.

I guess if I am blessed with some good bees, weather, health, etc. I could hire some part time summer help.

I figured the average age of beeks would probably be in the 60's. But that doesn't say how long they have had bees. Guess that is a factor for me and being 57.

My wife is okay with my bees but there is no way in he... she would let me bring home a swarm in the car.

As far as the TN Ag program that will pay up to 50% of your purchases there are some rules.


Must be in bees or worked with bees for 3 years
Must have completed or complete the UT Bee Masters beginners program within 1 year.
Have to stay in the program for so many years.
Authorized purchaces are pretty narrow in scope. It basically comes down to reusable resources. Sugar, pollen patties, oils, etc. are not allowable. They are consumables. Woodware, extractors, and other items are okay.
Hives, foundation, frames are okay if they are not replacements but are for new colonies.
They use to allow the purchase/building of a honey house but that was junked sometime back because too many of the beeks were building kid's play houses instead of honey houses. To me they should have taken these people to the cleaners and left the option still available.
Request for the program is like a 30 - 60 day window that begins around the end of June. Most of what you would be requesting in June/July would be for they following year. At least that's how it appears to me. You wouldn't purchase nucs that late in the year. Maybe an extractor, honey vat, hot knife for decapping comb.
Every item must be listed in detail. Including price, company from which you will purchase the item, and more.


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## camero7 (Sep 21, 2009)

Hey Ken,

I'm 67 and just getting back into beekeeping. I plan to expand to fifty/sixty hives in the next couple of years.

You're just a kid:lpf:


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## Batman (Jun 7, 2009)

Ken,

The guy that is training me, sells his hives, so he splits so he can sell them. Last year he said he started with 6 strong hives after winter and 1 weak. I know he sold a few, I was 2 of them. He had created over 55 hives. 
Anything is possible


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## Allen Dick (Jan 10, 2009)

> Anything is possible

Absolutely Some of us worry, though whether it is probable.

Big risks = big wins OR big losses.


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## Allen Martens (Jan 13, 2007)

As someone who traveled this path during the last 10 years (well sort of, I started with 250 hives my first year) I think many of the suggestions in this thread are way to conservative. Get your feet wet and see if the road to commercial is for you. 15 - 25 hives don't give you the picture.

If you've been a hobby beekeeper for several years you should have a relatively good idea of what a hive needs to stay alive and flourish. The step towards sideliner and commercial requires a change in mind set and an additional set of skills. Best way to do this is start with a number that will allow you to do this and see if this is the direction you really want to take.

As has been mentioned several times in this thread, do your research and decide what would be profitable in your area -- honey, nucs, pollination, comb honey, etc. Look around and see what other commercials are doing in your area. Are there commercials? Can it support commercials?

Getting back to my initial point. Start with number that involves a commitment--maybe a hundred. Kind of like the home yard gets neglected, it is much easier to procrastinate with a couple of hives. You've made a time and financial commitment to this journey. The focus now becomes one of maximizing profits or at least realizing profits with the most efficient use of time. Beekeeping can be enjoyable at the commercial level, but it is a business. If a proper return isn't realized, then the time and money are better invested in something else and beekeeping kept as a hobby. 

The rate of return at this size is as good as it gets. Most of the financial commitments are for money making assets like hives at this point. Other equipment can be bought relatively inexpensively for this size operation and buildings don't have to be as expensive. If your not making money at this size, the law of diminishing returns guarantees you won't make money at a larger scale, unless opportunities like pollination aren't available to the small producer. If this size works, and a commercial operation is the goal the hard part begins. While working a full time job, the goal is to increase hive numbers to level that will allow beekeeping to be a major source of income. TIME BECOMES THE ENEMY. There aren't enough hours in the day at this stage of the game and hiring help is difficult because you're at work.

Most importantly, keep the equipment standard. If at any point, you want out, it is easiest to sell standard equipment. People are not looking to buy supers made out of plywood.

One more thing. If you are planning to increase by 2 hives a year and are shooting for 10000, you will live a long life.


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## USCBeeMan (Feb 7, 2009)

That's mind boggling to me. 55 from 6 or 7. That has to take a lot of time or prep.

And thanks Allen for your wise input.


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## Specialkayme (Sep 4, 2005)

Allen Martens said:


> Start with number that involves a commitment--maybe a hundred.
> 
> One more thing. If you are planning to increase by 2 hives a year and are shooting for 10000, you will live a long life.


100 packages at $75 each = $7,500 investment. 100 complete woodenware hives at $75 each = $7,500. Total initial minimum investment first year = $15,000. That of course isn't counting a flat bed truck to transport them.

According to this, you would suggest what I put in the first post, that the only way to actually make it into the commercial operation is to buy in big from the start? Personally, I don't have $15,000 lying around. I also don't have the land at the current point in time to support 100 colonies. But, at a split of 3:1 per year, I can get 5 hives to 100 in 3 years (maybe even two if I'm able to do more than 3:1). That cuts down on half the investment, and distributes the woodenware costs over three years, making $2,500 a year. That is also doable, especially because in three years I can find/lease the land necessary to support the colonies. Not saying that is right, just saying that it seems much more feasible to grow than to buy in. But, that is why I'm here to learn.


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## Allen Martens (Jan 13, 2007)

By no means did I intend to imply that "going big" immediately was the only way to go. There many possible paths for growth. I'm not advocating for one path or the other. My intent was simply to present a different perspective. We all have differing levels of risk tolerance and investment potential.

At the risk of sounding like I am advocating, I will add a bit more info to explain my rational more fully. Splits are an excellent way to grow an operation. Splitting comes with a price though. Splitting at a high ratio comes with a high price. Splits need high inputs if they are to grow during dearths and survive winter if they have not had enough time or flows to gather honey for winter. More importantly, high ratio splitting also means revenues will be greatly reduced if not eliminated. With nonexistence revenues, expenses have to be paid for from personal cash or loans. To me, it makes sense to start big enough to produce enough revenue to provided cash flow for growth and expenses. Your right, this will require some debt. As I said before, if you are not making a profit at this size, it's time to refocus or reevaluate. No point pursuing something that isn't going to work. Beekeeping is not created equal across North America. What works well in one area is a bust in another. Good luck in finding your niche.


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## alpha6 (May 12, 2008)

Specialkayme said:


> But, at a split of 3:1 per year, I can get 5 hives to 100 in 3 years (maybe even two if I'm able to do more than 3:1). That cuts down on half the investment, and distributes the woodenware costs over three years, making $2,500 a year.


LOL...wait a minute are you serious? $2500 a year? Where do you think your queens are going to come from? What about extracting equipment? How you going to move the hives and supers? Where you going to keep them for the winter? How about feeding them? And you are going with 100 percent survival and a 3 to one split is going to make your hives so weak they will be lucky to survive the winter let alone produce anything so don't count on any income the first three years. Wait till you see how much more it costs to get the equipment and bees for five hives and keep them alive...whatever you think it is...double it.


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## sqkcrk (Dec 10, 2005)

Specialkayme said:


> Personally, I don't have $15,000 lying around.
> 
> I also don't have the land at the current point in time to support 100 colonies.
> 
> That is also doable, especially because in three years I can find/lease the land necessary to support the colonies.


That's why you need to find someone who will sell you hives and go to the FSA for the money and pay it back in 7 to 15 years.

You don't have to own the land that your bees are on or the land that they forage on.

How much are you planning on spending to "lease" the land necassary to support the colonies? I pay yard rent for the right to use someone elses land for my apiaries. But I don't "lease" it for very much, monetarely speaking.


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## bigbearomaha (Sep 3, 2009)

I notice the flow of the discussion seems to be going on full time honey production.

I have turned my hobby as a bee technician into a side business as we speak and will build it to be a full time business, hopefully sooner rather than later. no major honey production required.

I am expanding from just selling custom built tbh's and the local honey I will/may get from them but I am going to be working as a reseller for a national bee supply house.

Things are already picking up and I already have people west of the Miss. wanting to pre-order those items I will have access to. 

On top of that, I will be doing live bee removals and swarm collecting and relocating them as part of the conservation effort I am putting together.

With creativity and willing to use some elbow grease, one can indeed take their bee 'hobby' and make a run for business related to that. It's not always honey.

At least, it's not for me.

Have fun, enjoy the bees.

Big Bear


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## Specialkayme (Sep 4, 2005)

Allen Martens said:


> My intent was simply to present a different perspective. We all have differing levels of risk tolerance and investment potential.


Your points are both noted, and welcome. I appreciate the input.



alpha6 said:


> LOL...wait a minute are you serious? $2500 a year? Where do you think your queens are going to come from? What about extracting equipment? How you going to move the hives and supers? Where you going to keep them for the winter? How about feeding them?


If you looked at the post, I was only talking about woodenware. That's it.

The cost of 100 wooden hives is about $75. If I split up the cost amongst three years that would be $2,500. I never said that would be the only cost associated with growing the operation. I even mentioned that it wasn't covering the truck to move the bees.

My point was just that if I grow, rather than buy in, I can transfer the cost of woodenware over a few years, rather than having to put it out all at once.




alpha6 said:


> And you are going with 100 percent survival and a 3 to one split is going to make your hives so weak they will be lucky to survive the winter let alone produce anything so don't count on any income the first three years.


I don't need a 100% survival rate. If you do the math, if I start with 5 hives this year and do a 3:1 split, next spring I have 15. A 3:1 split next year puts me at 45 in the spring two years from now. A 3:1 split then gives me 145 in the third year.

If instead you want to attribute a 20% loss each year, in three years I can still get to 86 in three years. (12 at the spring of year one, 29 at the spring of year two, 87 at the spring of year three).

As far as income, they arn't producing income to me right now. So not giving me income in the next three years is actually already calculated into it. I'm planning on making nothing from them.



alpha6 said:


> Wait till you see how much more it costs to get the equipment and bees for five hives and keep them alive...whatever you think it is...double it.


I have been keeping bees for a while. I understand the costs that are associated with keeping them. My point was just that it is cheaper to let them grow than it is to buy into an operation.



sqkcrk said:


> How much are you planning on spending to "lease" the land necassary to support the colonies?


Hopefully very little


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## Buffalolick (Jan 26, 2010)

Excellent posts from Allen and Big Bear. 100 seems like a good round number to shoot for. Good advice on the plywood..I have been wondering about using plywood for hive bodies and supers. I still think spreading the costs and paying for growth as you go is the best bet. It's how I plan to go foward. With all due respect, the prof. who says not being willing to borrow against one's house to fund a business is a lack of faith in one's plan is insane. You simply cannot factor in drought, disease, dearth, floods, some new super mite or increase in CCD, cold snaps, heat waves, bear attacks, rabid skunks, new governmental regulations, vandals, thieves, earthquakes and forrest fires. There's a difference in faith in one's plans and ability and just out and out gambling.


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## sqkcrk (Dec 10, 2005)

Specialkayme said:


> If instead you want to attribute a 20% loss each year,
> 
> Hopefully very little


30% is more like normal these days.

And hopefully very little doesn't seem like much of an answer to me. I would have liked to have seen a number, like 3 half gallon jugs of honey or a bucket of honey or $100.00 or something that showed that you knew how much it costs for Yard Rent.


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## Specialkayme (Sep 4, 2005)

sqkcrk said:


> 30% is more like normal these days.
> 
> And hopefully very little doesn't seem like much of an answer to me. I would have liked to have seen a number, like 3 half gallon jugs of honey or a bucket of honey or $100.00 or something that showed that you knew how much it costs for Yard Rent.


I've been able to keep them on the corner of a farmer's yard for free lately. I think he wouldn't have a problem if the number of hives grew to 20 or so, but more than that and it might get a little inconvenient. He may be a little more swayed by some honey or something, who knows.

Other than that, I think other farmers would be willing to give me a similar deal, but I havn't asked. I havn't had the need to either.

When I need to, I'll ask.


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## sqkcrk (Dec 10, 2005)

Buffalolick said:


> the prof. who says not being willing to borrow against one's house to fund a business is a lack of faith in one's plan is insane.


The guy that wrote the article is a business man, not a professor, so I think he knows something about what it takes to be in business and to get money from lending institutes.

If all you have that is worth anything is your house, what else are you going to borrow against? And if you don't use your house as collateral, what does that say about your faith in being profitable?

I don't think that the author of this thread should go into debt to go into the bee business. As I have written before, he should coincentrate on the business part of his venture as much as any part. He says that he already knows how to keep bees, so, what does he know about business, the business of beekeeping?


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## Countryboy (Feb 15, 2009)

Today I attended the 38th annual Beekeeping Comference in Wooster, Ohio, billed as the largest 1 day beekeeping seminar in the nation. I believe 980 beekeepers were there today.

One session I sat through was titled Diversified Sideline Beekeeping. The auditorium had a pretty large crowd of folks wanting to know ways of diversifying their sideline business.

The speaker proceeded to tell how he accumulated 25 buckets of honey in his basement from his 40 hives, and finally decided to find a way to get rid of the honey or get rid of his bees, and how he was able to talk a local store and restaurant into selling his honey.

He also told how if he has a hive die for any reason including winter deadouts, he burns all the frames. (but doesn't scorch boxes.) He was totally misinformed about how AFB spreads, and told folks the only way to deal with AFB was to burn frames.

When pressed, he admitted that he doesn't market any other hive product other than honey. (What happened to diversification?) He said he sells a little cappings wax, but it doesn't amount to much, and another beekeeper needed a few extra hives for a pollination job once so they used a few of his, but he didn't really think the money was worth the stress on the bees.

With this kind of misinformation out there, it's no wonder folks have such a difficult time understanding what all is involved in going from hobbyist to commercial.

(FWIW, Latshaw's talk on Midwest Queens had more information on sideline activities, ie selling overwintered nucs with local queens, etc.)


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