Bees, Bubbles and Business

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Until three years ago most of my working life had been about finance in one form or another. I started as a trainee accountant in the City of London, way back in the ’80s, and I have worked in both large and small companies doing exciting things like financial analysis, financial planning, pricing, budgets, process improvement and so forth. Theoretically, I should know a thing or two about money. I have even been the finance director of a start-up company and seen it right through to sale, and boy oh boy, there were some stressful times along that particular road.

My beekeeping to date has not been about money at all. It is my joyous escape into the wondrous sights, smells and sounds of Mother Nature. If I were to have recorded my costs and my occasional meagre trickle of income from this venture, it would show an utterly suicidal business destined to end in poverty and despair.

I had a period in my life when I was involved in horse racing and making money from betting on the impressively muscled thoroughbreds that hurtled around Ascot, Sandown, Epsom and Newmarket. Once I used a very early neural network program to rate horses using artificial intelligence, and even now I’m pretty sure my collaborator is still using it and selling the ratings to punters.

Lessons from a Walrus

I learned certain truths from both my business and my gambling pursuits. The main ones are:

  1. I am not much of a gambler; I hate losing money and prefer to protect what I have and only risk a small portion rather than “bet the farm” on some grand scheme
  2. Meticulous recording of financial transactions is an absolute necessity to honestly know what is going on
  3. It’s not just recording though; you have to turn that data into meaningful reports, ideally with charts focussed on key metrics, and you need to look at that stuff regularly so that you know where you stand. Wishful thinking is nice, but you need to be honest with yourself and face the sometimes brutal facts rather than looking away and hoping that things will turn around
  4. Sometimes things go wrong because you made a mistake, sometimes they go wrong because of matters beyond your control. The same applies to when things go right. Not every bit of good news is the result of your genius. Keeping a healthy perspective is essential!

Types of Business

As far as I can tell there are two main reasons for setting up a business, which includes even businesses like commercial beekeeping. The first is to grow a business into something valuable and then sell it; the second is to earn a comfortable living from doing something that you love and maybe pass it on to your children. Most beekeepers that I have met fall into the latter category; their businesses are “lifestyle businesses” where the objective is to have a great life doing something that they love and to earn enough to live well and ensure a secure retirement.

In a “grow then sell” business the objective is to show a story in the financial accounts. That story must be one of continual growth in both revenues and profits. The value of the business is not just numbers; it is the skills of your workforce, the talent of your leadership team, the culture that you create and the reputation that your products or services have in the world. Such things command a good price in the market; if you do this right, you can become very wealthy. In these companies, you are going to have to show profits, and therefore your tax bill will reflect that. It’s about deferred gratification; your rewards will come at the end when you sell.

Is that a bubble I see before me?

In beekeeping, there are occasionally situations where people may try to capitalise on specific opportunities that present themselves to the entrepreneurially inclined. The two opportunities that spring to my mind are (a) the Manuka honey phenomenon in New Zealand and (b) the pollination of almonds in California. The prices commanded by both Manuka honey and hives for almond pollination have ballooned rapidly in the last decade. These price “bubbles” tend to attract people into the industry who are not necessarily steeped in the history of the craft or who have a great love of bees, although those folks are still by far the majority.

I suspect that when bubbles pop, as they inevitably do, then the businesses left standing are the ones that are run in the right way, the ones that kept an eye on costs and did not overreach; they played the long game rather than chasing the fast buck. The commercial beekeepers that I have met are not exploiting bubbles. They are doing something that they love, and they are doing it well. For them, it is a way of life. They rarely take holidays – why would they? They are obsessed by bees!

Here are a couple of examples:

Olivarez Honey Bees

Ray Olivarez: Recently I was working more in the business than on the business for a while, just three months ago. I worked every day for two months in Montana because it’s not like work to me. I took one day off and flew with a friend to a cabin in Idaho on the Snake River, but I was out in the field the rest of the time helping because we were short of employees…

Me: And you love it!

Ray Olivarez: Oh yeah, it’s not like work. That’s what people always say, they say, “we’d rather see you go fishing,” but if I’m splitting a hive or looking for queens on a Sunday, that’s actually a lot of fun.

Exmoor Bees and Beehives

Peter Little: My ambition is to stay on as long as possible, keep breeding bees, and then one day drop dead in an apiary.

Me: There are worse ways to go.

Peter Little: I’ve got no desire to go anywhere or do anything else. I feel quite like I’m in Heaven right where I am.

Denrosa Apiaries

Me: What do you do outside of the bee season and where do you go for your holidays? Or is that “not applicable” given what you said earlier about hours?!

Murray McGregor: It is a “not applicable!” As I said to you last night I’ve had three holidays in 35 years and they don’t add up the three weeks between them, and I hated all of them to some extent because they took me away from what I like most…

Me: So you are very lucky in many ways

Murray McGregor: Very lucky. Normal rules don’t apply. I’m doing what I love, I love what I do, and if I was offered a holiday I’d probably go and look at bees.

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