# **INPUT NEEDED*** 1500 colony operation



## beegolden (May 1, 2014)

First off, for any one wondering I have 275ish hives with 4 years experience with bees. Also, have taken multiple bee classes at cal poly and have continued to work with the prior instructor helping with his queen breeding operation.

So I am putting together a business plan to run a 1500 colony operation as part of my senior project requirement to graduate at Cal Poly. After submitting my draft my advisor thinks my numbers are way off and running a commercial operation cant be that profitable. Attached are my financial statements I constructed. **I am not paying for land or rent due to the fact the whole operation is on our family ranch** Also, I still need to factor in fuel and labor cost. But other than that, what recommendations or comments do you have? 


Also, it would be greatly appreciated if you could chime in on how your operation is and what your revenues are like!


----------



## Shouse (Jul 1, 2010)

I have an Excel Monthly Cash flow and Budget schedule I would be happy to share with you. send me your e mail. You must have excel program, which it looks like you do.

With 1,500 hives, the right equipment, lots of hard work, you can net north of $100,000.


----------



## beegolden (May 1, 2014)

awesome that would be amazing and greatly appreciated!!

[email protected]


----------



## JWChesnut (Jul 31, 2013)

Say hello to Scott J.

I assume the first year cost "100 triple shallows @ $150" represents buy-in of bees to split and populate the 500 new hives.

No costing out of the queen/nuc production to populate and provide replacement to the hives. At 25% casualty, you have a replacement need of 125 hives to make the first year numbers, and a continuing replacement demand of ~400 hives in the "third year" and out. A 400 hive nuc operation is going have costs and *time* requirements associated with it. This means 1500 billable colonies have 2000 actual colonies behind them to maintain the working population, and your supply and maintenance numbers have to be inflated by the reserve hives (the queen builders, etc). The 25% casualty is based on 20% dead out and 5% dinks. Your casualty is going occur in November-December, and you won't be able to make up numbers in time for Almonds, so you have to go into the fall with extra numbers to pad the inventory for the all important February frame count.

No line item of feed + labor to maintain feed. Sugar is cheap, sub not-so-much. Will you need feed top lids, pumps, tanks, etc. 

A $6500 used truck pulling a new $46,000 forklift-trailer combo sounds like a maintenance issue. You have 2x the number of hives the truck will haul the first year, 6x the third year. Will you make 6x round-trips to SLO to pick up your wintering bees? or $$ contract with a hauler to drop in the Almonds. Even if you are just hauling the skidsteer to load and unload, that is a lot of time/miles. Either way the net from the Almonds will drop.


----------



## sqkcrk (Dec 10, 2005)

Cost of replacement? Queens? Nucs? Packages? Paid labor? Misc. expenses?


----------



## beegolden (May 1, 2014)

I will say hello to Scott tomorrow for you, what is your name so I can tell him you said hello? I am picking up some queens from him tomorrow to take back to our bee yard/ ranch (Tulare,ca). And yes, the 100 triple shallows we purchased this year after the almond season to split and try to populate up to 500 hives. And for the past 2 seasons I have only had a 10% hive loss over winter and hopefully can keep it fairly low. 

good point! I do plan on raising my own queens but did not factor in the cost of the queen production and nuc equipment. The labor for feeding, I plan on doing all the feeding by myself or with one other employee (already employeed by grandparents for their ranch and has been helping with the bees on my grandparents dime). But yes, i did not factor into the cost of all the feeders that will be needed or that exact number of the cost for medicating/feeding. just a rough ball park.

For the truck/forklift combo, that was all my grandfathers decisions (he's hard headed and loves to spend money and not very good at being economical). Prior to this year, we were just using a old trailer to transport the bees to the almonds ( literally less than 1 mile away, right down the road) and driving the forklift(a big heavy duty off road one for the ranch) over there to unload them. Then this season over my spring break, I got a grower to let me take my hives to his Orange groves in porterville, ca (30 mile away approx). Me being home only for a few more days before school started back up, my grandfather went and randomly bought that flat bed truck just pretty much because he was rushed and wanted to take the bees over there when i was in town to help. He also went and bought a new tilt trailer for a smaller forklift that we had on the ranch already as well. So now we have the used flatbed for $6500 and a brand new tilt trailer to haul the forklift that was $6000. After actually having to haul the bees more than 1 mile down the road to the almonds, my grandfather decided that the forklifts we had weren't going to cut it and he went and bought a brand new hummerbee xrt. 

I plan on using the ford 20' flatbed trailering the hummerbee behind for the first few seasons since all the almond contracts i will supply will be less than 25mi away. But yes, eventually after the first few years i plan on buying a new flatbed truck to transport the bees.

Does the income section on my spreadsheet look plausible to you? or are those numbers not achievable?


----------



## beegolden (May 1, 2014)

**Also, when constructing the spreadsheet I was using all prices from Dadants catalog (boxes, lids) which are EXTREMELY higher than Used Pallet out of Fresno, Ca where we will be purchasing all our lumber needs. I just used the dadant prices to incorporate a small cushion for unseen expenses.


----------



## sqkcrk (Dec 10, 2005)

Raising all of your own queens means not doing something else when you might aught to have. Especially when you are just getting started. Which doesn't really describe your situation totally accurately, but sorta does.

Jim Lyon would be a good one to chime in here. Or Keith Jarret.


----------



## JWChesnut (Jul 31, 2013)

Your grandpa is a peach. He has set you up nicely. Treat it as a commercial loan, and reserve a fund for capital and interest payback.
You are competing against outfits paying trucking from Florida -- sort of a built-in profit margin.
How concentrated will your yards be this summer. Not much nectar due to drought, will the new hives get robbed out heavily? Will the family ranch support the additional concentration of colonies without getting overloaded?

Will Tulare bees build up to 8 frames in January? Are you out of the Tule fog?

Is there star thistle and vinegar weed for the summer? Are they on Alfalfa in the fall?
The bees I see on melons/cotton look pretty sad and bedraggled by August.

I know another 1000 hive operation running off a single three-axle flatbed. The issue is he gets a call at 6:30 over dinner pm saying, "We will be spraying at 4 AM". He has to work all night running multiple loads, would work better with a second truck and driver, but that more investment and another hire.

The Hummerbee means you can piecework for others at the load and scatter. You and your labor can add as much side work as you have time to complete.


----------



## merince (Jul 19, 2011)

Insurance; license and fees; building, vehicle and equipment repair and maintenance and so on... There is also this thing called depreciation which takes into account that everything eventually wears out beyond the point of usefulness and needs to be replaced.


----------



## beegolden (May 1, 2014)

yes, insurance and license and fees will also need to be incorporated into the spreadsheets. and yes i am aware of depreciation, i have a fairly good mechanical background and going to do the repairs and maintenance myself. THIS IS A ROUGH BUSINESS PLAN. I AM NOT A BUSINESS MAJOR (don't need to factor in depreciation for my project req.) and i already have a building on our ranch for a honey house and plenty of storage for equipment and supplies.

I know i will be competing with other operations trucking bees in from all over the US. But, i feel like i will not have any problem finding growers to rent my hives; i have current relationships (mostly family) with almond/cherry growers who said I can have their business once my operation is up and going. Yes, the family ranch has the room for the additional hives i plan to run in the future. Recently my grandfather actually planted 50-75 acres of buckwheat as cover crop on some of his younger pistachio trees that gets flood irrigated when the trees do. There is alfalfa in the area but none of it goes to bloom. There is cotton, but yes not ideal and is harsh on bees. We have 200+ acres of pistachio trees that we farm with half of it being flood irrigated. So I was thinking of looking into planting clover or another crop that is beneficial to the bees as a cover crop since we are flooding the fields anyways and seed is relatively cheap. Also, i have a few relationships with farmers out in Lindsay/ Porterville area near the foothills for wild flowers but haven't been up there to see how the conditions are =/ I was also talking to scott last week, and he was saying he might know of a place/someone in CO where i will be able to take my bees over summer to make honey if i was interested. 

The past few years there has not been much fog in the valley due to the lack of rain but have been warned about the tule fog from Mr. Jeffreys! This last year i had some really strong hives and a few weak hives(management mistakes) in January getting ready for the almonds. Im curious to see whats in store for next season and how we do! 

We still also have a few old trailers and trucks on the farm that can be used in addition with the flatbed/forklift combo to make it less of a project (if using only one truck) But yes, that is a main goal of mine, to purchase a new flatbed truck within the first couple years that will be reliable for longer hauls and having 2 trucks total to help control all the havoc that can come with transporting the bee colonies.


----------



## JWChesnut (Jul 31, 2013)

The Project Apis M has 4 cover crop seed mixes: two mustard, a clover mix and a vetch mix. Your family farm sounds like the exact target for that bee forage program. Contact them to get on the (free) seed distribution list. http://projectapism.org/?page_id=72


----------



## beegolden (May 1, 2014)

wow, thank you very much that is tremendously helpful & awesome!! I am definitely going to discuss that program with my grandparents while I am home this weekend and see if we can integrate it into our farm this season!!


----------



## Kamon A. Reynolds (Apr 15, 2012)

beegolden I would learn (or if you can) to raise your own queens. Even though it takes some time you can raise every bit as good of queens as the average commercial operation. Buying queen cells would be (I think) the next best option. 

Doesn't take many colonies to raise 1500 queen cells.


----------



## beegolden (May 1, 2014)

Thank you for your input Tennessee's Bees. I plan on raising my own queens this summer once i graduate from school. I have past experience from Cal Poly classes and working with the former instructor on his queen business. So, i think it is reasonable for me to rear my own queens to meet my operations needs/demands.


----------



## Barry Digman (May 21, 2003)

beegolden said:


> For the truck/forklift combo, that was all my grandfathers decisions (he's hard headed and loves to spend money and not very good at being economical).


It's a grandfather thing. It's not the money, it's the support he can give his grandson while he's still able to watch the young man grow into his own and succeed. You're blessed.


----------



## beegolden (May 1, 2014)

Thank you very much for the kind words Barry. I know I'm super blessed to have such amazing grandparents helping me along my journey of starting my own business! without them none of this would be possible!


----------



## Roland (Dec 14, 2008)

Did I read this right? 3000 deeps and 1500 shallows for 1500 hives? So each hive gets 2 deeps and one shallow? 

We have different conditions here, but figure on 5 deeps per hive, max 4 on hive, and 1 in transit.

Is there labor included for assembly? 

Does some one have time to assemble?

Crazy Roland


----------



## Haraga (Sep 12, 2011)

What will happen when the land owners pass away? Will you inherit the land or will you move on?


----------



## Flyer Jim (Apr 22, 2004)

$150.00 for almonds might be a little low, but $50.00 for cherries is a little high ... so I guess it's a push. but you better find out


----------



## sqkcrk (Dec 10, 2005)

At less than $50.00/hive for cherry pollination is it worth it? How long are hives in cherries? Can you do cherries and then move on to something more profitable close by? Or something before?


----------



## Ian (Jan 16, 2003)

Roland said:


> Did I read this right? 3000 deeps and 1500 shallows for 1500 hives? So each hive gets 2 deeps and one shallow?
> 
> We have different conditions here, but figure on 5 deeps per hive, max 4 on hive, and 1 in transit.


Thats my figure also, but I have yet to achieve those box numbers LOL. Beegolden, in _time_ I will build to the number of boxes needed. Always short boxes!!


----------



## Keith Jarrett (Dec 10, 2006)

Roland said:


> Did I read this right? 3000 deeps and 1500 shallows for 1500 hives? So each hive gets 2 deeps and one shallow?
> 
> We have different conditions here, but figure on 5 deeps per hive, max 4 on hive, and 1 in transit.
> 
> Crazy Roland


One thing to remember..... Bee Golden is from Cali, where the average is less than a deep super a year.


----------



## Roland (Dec 14, 2008)

Agreed Kieth, different conditions. I guess I am not familiar with how the OP is running his hives. 2 deeps and a shallow is not enough room for our bees, and leaves nothing for in transit.

Crazy Roland


----------



## EastSideBuzz (Apr 12, 2009)

JWChesnut said:


> The issue is he gets a call at 6:30 over dinner pm saying, "We will be spraying at 4 AM". He has to work all night running multiple loads, would work better with a second truck and driver, but that more investment and another hire.


My call came in at 10pm saying we sprayed you need to get your bee's out. It took us 2 hours to get there and we just made it out by sunrise. Now if we had not dropped everything and ran to pick them up they all would have been dead when they went to the flowers in the morning. Too close a call for me last year.


----------



## AstroBee (Jan 3, 2003)

I'm not commercial, but I think your advisor is probably correct. If it was true that in 3 years a business could reach a net profit of $340K there would be a giant wave of people scrambling to reach that golden ring. I'd guess that you're probably off by a factor of 3, and perhaps more. Not trying to pour water on your plan, just don't think it is consistent with economic realities. Best of luck.


----------

