For Sideline, Even Commercial Beekeepers
Those of us attending local beekeeping clubs have seen several significant trends and changes over the last decade or so. There definitely seems more diversity of individuals who come to these meetings, as well as an overall increase in the numbers of people attending many clubs.
Many who initially attend local club meetings have at least an initial curiosity or interest in beekeeping as a potential hobby. They might read a bit about beekeeping and seek advice from veteran beekeepers at these clubs. Some will purchase nucs, packages or hives and try their hands at managing a few hives. Over time, they can have poor experiences or bad luck with their efforts, find that beekeeping isn’t their cup of tea, or just lose interest eventually in keeping hives and going to meetings. Others will maintain a few hives and produce honey for family and friends, without that much time or effort put into this hobby. Some folks, however, develop a more sustained hobbyist interest, attend local club meetings regularly, and at least a few of these will eventually consider beekeeping as a potential sideline or full-time business.
My personal interest involves beekeepers, whether hobbyist, sideline, or commercial, who want to discover ways to be more effective and efficient in their personal or business beekeeping decisions. My objective here is to describe some strategic approaches for sideline and commercial beekeepers to improve their efforts and results.
Full-time or commercial beekeepers seem more likely than hobbyists, or even sideliners, to view their beekeeping activities strategically. Many commercial beekeepers obtain some of their beekeeping assets and capital by the traditional approach of writing a business plan and using it to secure start-up financing. These commercial beekeepers might have secured partners or investors and/or financing assistance through a bank, the Small Business Administration (SBA), or other governmental loans or loan guarantees. In developing a business plan to obtain needed financial support, commercial beekeepers probably described many of their financing, operations, and marketing strategies. Some commercial beekeeping operations are more successful than others in developing and implementing effective strategies to gain sustained competitive advantage in their particular market niches.
Beekeeping sideliners, though, can often be very different in their objectives or goals, and in their planning and operations, than commercial beekeepers. Describing sideliners versus commercial beekeepers largely in terms of differences in the numbers of hives that they manage can ignore some of these huge differences. Some sideliners do follow the example of many commercial beekeepers in approaching their sideline start-ups strategically by developing a traditional business plan and trying to secure investments and loans. However, many of these sideliners do not, and some could best be referred to as “shoestring” sideliners.
Shoestring sideliners often start as hobbyists and gain increasing beekeeping knowledge and experience. They have enough interest or passion to become more involved in certain aspects of beekeeping and recognize a potential to make at least a few bucks doing so. These beekeepers often approach sideline pursuits by “putting a toe in the water.” They test a potential beekeeping niche, such as queen rearing, nuc preparation, or bee removals, before committing significant personal resources. They usually have limited start-up capital and funding for the first few years of their sideline activities, but may not need that much funding to get started in and test their sideline interests. Personal or family funding is used for many of their sideline assets and working capital, rather than obtaining major funding from debt sources such as banks and the SBA, at least in early sideline activities.
Shoestring sideliners are often retirees, young people just starting out in careers, and others who have some available time, and perhaps the need, to pursue these market-related activities. Unlike full-time entrepreneurs who devote most of their overall time and energy to the particular business, these sideliners often have competing or alternative work demands. Sometimes they also have significant personal or family obligations that prevent their putting in many hours of beekeeping work per week. Like me, perhaps you can count three to ten or more such shoestring sideliners who regularly attend your local beekeeping clubs.
Obtaining Strategy Assistance
There are a number of useful planning and strategy setting resources to assist start-up commercial and sideline beekeepers. Usually a short drive away in nearby cities is a college or university that has a Small Business Development Center (SBDC) and free counseling and workshops dedicated to the needs of budding entrepreneurs. Some universities also offer Small Business Institute (SBI) programs that might send senior and graduate student teams to study particular small businesses and provide consulting services. Still another option for consulting and advisement in many cities is the Service Corps of Retired Executives (SCORE) and its counseling services and many online video workshops.
Internet resources can also be useful, particularly for those who want to develop business plans for commercial beekeeping pursuits. A number of samples and templates for constructing business plans for beekeeping operations exist, can be easily accessed, and are profiled here – http://docplayer.net/5116998-Beekeeping-business-plan-workbook.html. This 47-page beekeeping business plan workbook was funded by the Illinois Council on Food and Agricultural Research and produced in 2003. The authors, S.M. Daily, S. Kohler, S. Jacobson and J. Buchheit, were SBDC directors/counselors and university agriculture researchers who provided a good planning template, much useful information on writing a business plan, and some cost projections for operating 10 mature beehives. Also look to – http://www.farmstart.ca/wp-content/uploads/Business-Plan-Template_CFBMC.pdf. The 65-page document and example of a business plan was prepared under contract with the British Columbia Ministry of Agriculture, Fisheries and Food by J. A. Lloyd Management Services. It covers years 1995-1999 for an existing 500-hive operation planning to diversify into pollen, comb honey and candle production, as well as develop a brand name and improve their packaging and promotional activities. http://extension.psu.edu/business/ag-alternatives/livestock/additional-livestock-options/beekeeping.
The site offers a sample business plan for a beekeeping pursuit starting with ten hives the first year and moving over time toward a 50-hive operation. It was prepared by M. Frazier, T. Butzler, L. Kime, T. Kelsey, and J. Harper, who are or were professors or researchers at Penn State University. http://www.profitableventure.com/honey-bee-farm-business-plan/. Another sample business plan is this one for a larger honey bee farm that packages and markets honey and sells bees, royal jelly, wax, propolis, pollen, venom and other bee products for domestic and global markets. http://www.thebeeinfo.com/the-honey-bee-how-to-start-a-bee-farm/ and http://www.buzzaboutbees.net/beekeeping-business-plan.html. These two sites also provide sample business plans, as well as offer some guidelines for starting a beekeeping enterprise.
Reviewing these and possibly other sample beekeeping business plans can obviously help those who wish to create a business plan for their own unique entrepreneurial concerns and future objectives, but keep in mind some serious limitations of these models. Some of these sample business plans are obviously dated in terms of their offering current beekeeping revenue and cost projections. These sample business plans also do not provide much guidance or market research for narrower and particular beekeeping market niches, even when mentioned as possible areas for future expansion or for secondary emphasis currently.
Although most useful as a checklist for including the many possible concerns in drafting a business plan, these samples hardly ever include guidance on how to analyze national or local markets and do competitor analysis in actually developing feasible operational, marketing, or financing strategies. Conventional strategy development tools such as SWOT Analysis (strengths, weaknesses, opportunities, threats), a focus on existing entrepreneurial strengths and weaknesses as well as environmental opportunities and threats, are mentioned and developed briefly in a few of these sample business plans. Yet this analysis and its strategic implications for beekeepers seem limited in scope with quite general recommendations.
Agricultural and beekeeping activities usually have even more threats and uncertainties than typical business enterprises. Diseases and weather are just two major beekeeping concerns. Flooding in 2016 seriously hurt many beekeepers in both north and south regions of my home state of Louisiana. Risk management and crisis management strategies for commercial or sideline beekeeping deserve more study and explanation in business plans than is commonly offered. Contingency planning approaches do not “put all of a person’s eggs in one basket” or in one set plan. A contingency perspective for strategy development anticipates the possibility or probability of major changes in economic and other key conditions affecting the business, and indicates the need for operational shifts soon after these conditions occur. Sample business plans found online hardly ever recommend a value or the basics of contingency planning.
As helpful as existing online templates for business plans, or even one-on-one SBDC or SCORE advisory assistance, could be for sideline or commercial beekeeper planning, these resources seldom reflect an awareness of regional or local beekeeping history, cultures, clubs, and relationships. The beekeeper, then, must supplement outside guidance with this type of awareness. Consulting or coaching resources for beekeeping business planning or strategy offered by those with significant beekeeping knowledge and experience can be more difficult to find and will likely be more expensive than SBDC, SCORE, or DIY approaches.
Many entrepreneurs actually approach start-up businesses activities using a “flying by the seat of their pants” approach. Shoestring beekeeping sideliners, in particular, may have little or no background in business planning or strategic thinking. They can also have little inclination to view what had just been a hobby, before, that strategically now. Not needing to acquire outside SBA or bank financing, and so not preparing any kind of formal business plan, they can easily overestimate or underestimate market opportunities, operate ineffectively and inefficiently, as well as poorly communicate their basic planning even to family and close friends assisting them.
Consulting and coaching assistance, such as free start-up advisement or strategy review, provided by a local SBDC or by SCORE volunteers may be overlooked. Even inquiries or visits to such sources may seem less than valuable to beekeeping sideliners due to these programs’ focus more on typical entrepreneurial goals and their lack knowledge of the culture and practices of beekeeping.
Shoestring sideliner, or any type of sideline beekeeper, can benefit even more than commercial beekeeping firm owners or managers from a strategic perspective for choosing and conducting their particular sideline. This strategic perspective acknowledges the individual’s unique goals, values, personal characteristics, strengths and weaknesses and ties this strongly to discovering particular opportunities and threats in potential beekeeping market niches. Commercial firms usually have more common profit-seeking goals and characteristics in contrast to the multiple goals, interests, and particular time and financial constraints of sideline beekeepers. Commercial firms can also have more access to market information about honey, other hive products, and beekeeping services than sideliners. Sideliners need strategic thinking to analyze possible beekeeping market niches and to develop more personalized approaches for choosing and undertaking the better options.
Developing a Basic Strategy
So how can a sideline or commercial beekeeper without much experience in or knowledge of strategic planning make better decisions and implement these more successfully? I’ll try to provide at least a few tips based on my own background and experiences.
- Try to describe better your own goals, interests, values, and other personal characteristics in establishing a beekeeping sideline or business. Although these might seem obvious to you, taking a little introspective time to list carefully these characteristics may allow you to develop a few less-than-fully-realized ones. This listing allows you to share it with one or a few close beekeeping friends or family members who might comment on these, question a few of your assumptions, and suggest other items that you could have overlooked.
- Do more market research on the beekeeping niches that you might consider pursuing. There are likely primary sources (ways to interview actual beekeepers involved in these niches) and secondary sources (data bases of collected information on these niches) of which you are unaware.
- Consider carefully how opportunities and threats identified in particular market niches (from #2 above) match or fit your own personal or obtainable resources and characteristics (from #1 above). Can you see a strategy that allows you to take fuller advantage of your resources and strengths and compensates for your weaknesses in order to gain what seems a competitive advantage in a particular market niche? Securing some form of sustainable competitive advantage can be critical for success and profitability, especially in “lean” markets or geographical areas where there are many active competitors.
- Steps #1, #2, and #3 are the strategic basics for creating a simple business plan. Go online and find sample business plans for beekeeping operations. Reading through a couple of these business plans should suggest a few additional planning concerns that you might want to consider and then cover in your personal planning.
- Once you have several pages describing your sideline or business strategy, consider the possibility of sharing this with a SBDC, SCORE, or a strategy advisor with some beekeeping experience. These services should be free or might not be that expensive, and the advice might be well worth the brief time to obtain it.
- Communicate this basic plan to family members and/or those who will be assisting you in your sideline activities, monitor operational progress related to these plans, and revise the plan when competitive conditions or your own personal circumstances change significantly.
The Small Business Administration estimates that over 50 percent of small businesses fail in their first several years. Even many beekeeping sidelines and businesses that survive likely do so with the albatross of certain nagging planning and operational inefficiencies. Since better planning, as well as operational control strategies, can improve beekeeping effectiveness and efficiency, why overlook this type of assistance and a potential for greater success?
Dr. Steve Payne is a retired university management professor, a beekeeper and former beekeeping club officer, and a current board member of the Louisiana Beekeepers Association. He occasionally provides strategy consulting and coaching through his beekeeping sideline business, Strategic Beekeeping Services. For information on this or obtaining Dr. Payne’s recently completed book on these and related topics, Strategic Thinking and Management for Beekeepers, contact him at email@example.com.