Annual Running Cost for a Hive

[SteveJ]

I'm trying to write myself a business plan for a small scale Beekeeping Enterprise.

Now I can build a Commercial Hive for approx. £100 each. I'm just trying figure out what the annual running cost of a hive would be.

All I can think of at the moment is Foundation replacement, medication and Feed. I'm assuming replacing half the foundation every year. Is there anything else I need to consider?

I'm not factoring in travel as that would come under Apiary Running Costs, and Jars etc. would come under Packaging costs.

SteveJ

 

[Anduril]

You need to factor in swarm control, queen rearing and making increase.

 

[Fatbee]

You might be better off starting by doing plan as a complete enterprise so including replacements, depreciation of equipment, processing costs etc based on the number of hives you plan on operating. This way you capture everything and then you can divide by number of hives you have got. ( and when you say per hive do you mean per production hive - how will you incorporate splits, nucs etc)

 

[enrico]

Extractors, storage, colony losses.
E

 

[PaulCarroll]

What about hidden costs such as complying with legislation, Hygiene, health and safety. All are business costs which could impact upon total costs of running your hives!!

 

[Dishmop]

Is there anything else I need to consider?

Finding out how to build a cheaper hive?

 

[pargyle]

I'm trying to write myself a business plan for a small scale Beekeeping Enterprise.

Now I can build a Commercial Hive for approx. £100 each. I'm just trying figure out what the annual running cost of a hive would be.

All I can think of at the moment is Foundation replacement, medication and Feed. I'm assuming replacing half the foundation every year. Is there anything else I need to consider?

I'm not factoring in travel as that would come under Apiary Running Costs, and Jars etc. would come under Packaging costs.

SteveJ

If you are writing a business plan to be presented to a bank or other organisation then it's best to follow a standard layout. There's some good free on line guides available which also provide pre-constructed spreadsheets that work out the financials for you. I don't know whether you have seen this:

https://www.gov.uk/write-business-plan

You should not mix up 'Capital' items - Hives and hive parts and other equipment which will remain in use for a period of time with 'Consumables' which are going to be used, feed, treatments, jars, etc. (possibly even frames could be considered as consumables).

You should also be factoring in labour, energy costs, premises, travel, fees and taxes if your are doing it properly. There will be fixed and variable costs associated with most aspects of beekeeping - the fixed costs tend to be the easy ones - the difficult ones to predict are the variable ones.

I would start by making a list under the various headings of what you actually use now in your beekeeping and then start looking at the costs of the various items, working it up to a larger enterprise. I don't usually allow for discounts relating to the benefits derived from scaling up as these can never be guaranteed and just come as a bottom line benefit if they are negotiated.

Sorry ... probably teaching you to suck eggs and not answering your question !

I would add to your hive running costs - Replacement queens (if you were faced with buying in) as this would be part of the running costs.

I'm sure some of our more commercial beekeepers will be of assistance - I've done a fair bit of business planning during my working life but I've not yet applied any skills I have in this respect to my beekeeping - the losses would scare me sh....less I think !

 

[B+.]

You will have to look at it as two separate projects: set-up and steady state operations. If you set your operation at, say 100 colonies, you have to make a decision on whether to make or buy the equipment. If you choose to buy, you simply take the cost as being whatever you can get them for from a supply company (including any quantity order discounts). If you choose to make your hives, decide what machinery you need to turn the raw material (wood) into a finished product (not forgetting power and labour, NI, holiday pay, etc). If you choose the former, it might be easier but more expensive, choosing the later means you acquire the means of production and can manufacture more at a marginal cost.
Next, do you buy in nucs, or do you split a number of colonies? Either way, forget any thought of an income during your first year (or longer) as they have to build up and draw out brood comb. You may say that you need an income during your first year and be satisfied with half that number (50) during your first year. In that case, you exchange the need to buy deeps for the need to buy supers/queen excluders, and the means to extract/process honey. Do you have a market for it? What price can you acheive? The level of income could impact your ability to grow the business and your start up phase could merge into the operational phase.
You have to plan for tax, NI, sick, holiday, fuel/energy, vehicle tax, maintenance, etc....and lots of things I haven't even mentioned. If you intend to run a food production business (honey), you will need premises that have been approved by your local council (environmental health department?) who may require you to make costly modifications.
You will need telephone/internet, legal and accounting services, local business rates, insurances....this is just a brain dump. I am sure there are lots of others I haven't thought of.

 

[madasafish]

If honey, extraction, jars, labels etc...

 

[SteveJ]

So lets modify my original question slightly and hopefully I will get the answer I am looking for. What is the annual running cost for a hive post setup?

SteveJ

P.S. I refuse to pay the Bees NI

 

[For want of a better word]

I attempted this excercise some time ago ( 10 years?), and basically for the costing of honey production.... but did not include marketing costs.

NOT allowing any margin for profit, or marketing, but covering everything else everyone has mentioned, including capital depreciation and cost of borrowing....

£3.60 per 227g (8oz) clear honey in hex jar with professionally manufactured label.

VAT was not put into the equations as complicated thing too much ( was a mere 17.5% back then)

Yeghes da

 

[Into the lions den]

I'm trying to write myself a business plan for a small scale Beekeeping Enterprise.

Now I can build a Commercial Hive for approx. £100 each. I'm just trying figure out what the annual running cost of a hive would be.

All I can think of at the moment is Foundation replacement, medication and Feed. I'm assuming replacing half the foundation every year. Is there anything else I need to consider?

I'm not factoring in travel as that would come under Apiary Running Costs, and Jars etc. would come under Packaging costs.

SteveJ

There are SO many costs to be included.

Unless you are doing a lot of cut comb or chopping out the combs to squeeze the honey 50% foundation replacement seems excessive.

However....the following items need to be included. I know you are intending to strip out apiary running costs, but that is just fooling yourself about the true cost, as these are an integral part of running the bees, and you cannot operate them from your armchair at home.

So....list not exhaustive...

Feeding
Medication
Repairs and renewals
Labour (excluding you own if a sole trader)
Fuel
Bee purchases if any.
Depreciation (old hives are worth less than new)
Rent
Vehicle costs, including repairs and depreciation.
Insurance (if not covered by your BKA)

from this point on you have options about extraction, filtering, presentation and marketing, but before calculating the costs of the honey for selling you need to include extraction costs, utilities, etc etc. Selling in bulk is easiest, but then the market sets the price, not you.

In my own unit the cost is approx. £108 per colony per annum. Sounds a lot but it does include my wages as I am not a sole trader. Its my bill for hot pies on the road that really screws it up lol.

We sell in bulk, and this works out at about 33lb of heather honey and 0lb of blossom honey. The crop proportions vary sharply from year to year, but its a bad bad year when we do not reach this level...............and 2012 and 2013 were thus in our area.

 

[SteveJ]

Well I can rule out Labour as there is only me.

Last year I had 4 production colonies and averaged over 75lb per hive of blossom and 20lb per hive of heather. This year its going to be 12 production hives with the plan to limit myself to 20. Though I probably wont take the full complement up to the Heather.

I'm basing all my calcs on a 50lb average per hive and I normally get over that.

SteveJ

 

[Dishmop]

What is the annual running cost for a hive post setup?

Remember that running two hives wont be double the cost of one.

 

[casualman]

Suggest you read ROB Manley's book Honey farming for anyone thinking of going into beekeeping on a commercial basis. Available free online on Beesource.

His best point is that you need both capital and experience at the same time otherwise your capital will be exhausted by the time you have experience to run this business.

As to the cost per annum for each hive. As others have already said you need to include everything to get the true cost. Asking others is not helpful because some costs they have may or may not apply to you depending on what equipment you already have to make hives for example. In addition to this working out your costs yourself is a fundamental task that everyone who starts a business, however small it is, must do themselves otherwise they will not be able to appreciate/understand the costs of running their business. without that basic skill there is no chance of making any profit and your enterprise is doomed to failure.

 

[B+.]

VAT was not put into the equations as complicated thing too much ( was a mere 17.5% back then)

Yeghes da

VAT is now 20% but honey is a food so VAT should not be charged.

The question you ask is difficult to answer because a lot of the costs would be spread over the total volume of production (i.e. averaged out)

 

[thenovice]

Well I can rule out Labour as there is only me.
SteveJ

So you are going to work for free ad infinitum? Running a bussiness means you are SELF employed. that comes with salary obligations as stated above. Not including that in your business plan is fooling yourself (and if you need a loan, they will not be fooled)

 

[Dishmop]

Its a hobby. You do it for fun. To help the dwindling bee population.

 

[enrico]

Last year was the first year I feel I have really made a profit , ie the honey made more for me than the bees cost in that particular year, and I started in 1981!!!
Don't hold your breath if you want to make a profit! But..... I don't run my apiary as a business, just a hobby!
E

 

[B+.]

Its my bill for hot pies on the road that really screws it up lol.

Hold on...let me do a business plan for selling hot pies