The late R.O.B. Manley made many attempts to quantify the costs of beekeeping...
Most that I have seen about this topic indicates that it is not a worthwhile business to be engaged in.
However many people all over the world do make a living in this
manner so it is worthwhile to show the rudiments of business
planning and financial forecasting here.
Profit and loss
- Annual Expenditure (Fixed Costs)
- Apiary rent
- Rent of premises (if rented)
- Business and water rates, Accountant's fees
- Insurance (there may also be a variable element to this due to
colony numbers)
- Loss of interest on own capital
- Interest paid on borrowed capital
- Bank charges
- Depreciation of Assets
- Vehicles (trucks and fork lifts)
- Premises (if owned)
- Bees in hives, Hives and frames
- Extractors and other processing equipment
- Clothing, Office Equipment
- Replacement of worn out equipment
- Annual Expenditure (Variable Costs)
- Labour Costs
- Queens (if purchased)(or the materials and labour if "home grown")
- Feed and Chemical Treatments
- Electricity, Gas, Heating Oil, Petrol and Oil
- Water Bills (extra to water rates)
- Vehicle maintenance, Building maintenance
- Carriage
- Packing materials, including Jars, Lids and Labels
- Ingredients for Soap, Ointments, Creams, Leather dressing and any other
associated products
- Marketing, Advertising, Bookkeeping, Office Administration
- Annual Income
- Honey Sales @ Retail
- Honey Sales @ Wholesale
- Sales of Other hive products (Wax and Propolis)
- Sales of Soap, Ointments, Creams, Leather dressing and any other
associated products
- Sales of Queen bees and Nucs
- Pollination Contracts
- Resale of equipment bought in bulk (to other beekeepers)
Cashflow Forecasting
As well as your projected profit and loss the dynamics of cashflow
are important if you are seeking working capital from a bank.
Cashflow in beekeeping is not steady, as income mainly comes after the
processing of the honey harvest.
Cashflow can be difficult in a beekeeping startup situation as
delays before returns can mount up!
Break Even Point
Income and
expenditure are plotted against honey production.
This graph can be
used either to establish the profitability of an enterprise or
conversely it can be used to find production targets for given
reward.
The dotted red cost lines refer to the situation where some fixed
costs may vary with colony numbers in a linear fashion. The Pink
lines represent jumps in fixed costs like the need for a second or
larger vehicle.
In many beekeeping enterprises no "profit"is
made until after the first 8 or 10 hours have been put in during the day.
The "Break Even Point" may not occur until the last month of
the year, which may incur extra interest on working capital borrowed.
In a "bad" year the break even point may not be reached, then some
serious appraisal of what went wrong is then needed, but it is not
enough to know what went wrong, you need to correct the problem.
Write Down Times Suitable for Beekeeping
| ITEM | Useful Life |
|---|
| Bees and Comb | 1 Year?? |
|---|
| Woodenware | 20 Years |
|---|
| Clothing | 5 Years |
|---|
| Extraction and Processing Equipment (Metal) | 25 Years |
|---|
| Extraction and Processing Equipment (Plastic) | 15 Years |
|---|
| Vehicles (bought new) | 7 Years |
|---|
| Vehicles (second hand) | 5 Years |
|---|
| Buildings | 25 Years |
|---|
| |
|---|
Beekeeping has some peculiarities in this respect, bees may be subject
to disease and/or vandalism.
Combs can only be considered to have the value of the
wax that could be rendered from them.
Gloves wear out after
one season's use and must be considered as consumables rather than
clothing.
All aspects must be considered in great detail and a marketing plan,
Cashflow forecast and business plan prepared with realistic figures,
that can be honestly justified when the bank asks questions.
Beekeeping is no easy ride!
Revised... 17 October 2001
Transferred to New Domain... 24 July 2004,
